Understanding the Maximum Insurance Coverage Under the EDLI Scheme: Can You Help?

Dear friends,

Hi! Please let me know what is the maximum insurance amount to be given under the EDLI scheme.

Regards,
Puja

Dear Puja,

0.51% of the basic salary is contributed under EDLI by the Management. The breakdown of the 0.51% is as follows:
- 0.50% for EDLI contribution
- 0.01% for EDLI Administrative charges

With Warm Regards,
K.P. Misra

Ms. Puja,

EDLI maximum benefit is Rs. 60,000. This will be paid only in case of death. You can also take an exemption from PF in lieu of EDLI. You can introduce a Group Insurance Scheme from LIC. LIC will cover all your employees, and a uniform benefit will be extended from the beginning of the policy, with Rs. 62,000 being the maximum benefit extended by LIC. It is very easy to apply and get permission for exemption from the Provident Fund Office. The premium payable will be less than the amount currently being paid. The process of claiming death benefits with LIC is straightforward, and the benefit will be given within three days from the date of the claim, provided the application for the claim, along with the death certificate and bank account details, is certified by the employer.

Thanks & Regards, G.A. RAMAKRISHNA

Thank you for your contribution. I read somewhere that it was 35000/-. What exactly does that mean? I am puzzled between 35000/- and 60000/-

Priya

We are having doubts as we both urgently need the exact number - the maximum amount of insurance under the EDLI scheme.

Puja

Dear Puja,

The correct amount is Rs. 60,000. If you have any doubts, please contact the Regional PF office.

Satya

If the EDLI scheme is being administered from the RPFC, then the maximum insurance amount claim for EDLI can be only Rs. 60,000/-. Today, you can obtain an exemption from RPFC for maintaining the EDLI scheme instead with an insurance company.

In this case, only the administration charges towards EDLI need to be paid to RPFC, whereas the EDLI policy can be maintained as any insurance policy with the insurance company. The exemption requires that the EDLI policy so obtained be able to provide better benefits to the employees than are available under the EDLI scheme of RPFC.

Currently, insurance companies like LIC, MetLife, etc., provide a scheme of up to Rs. 1 lakh with the additional provision of a Double Death Benefit rider, which gives double coverage in the case of an accidental death.

Hi Members!

EDLI maximum benefit is Rs. 60,000/- in case of death. What will be the limit in case of permanent disablement and with what amount, as the employee is not covered under ESI due to a salary exceeding Rs. 10,000/- and wishes to avail benefits under PF.

If we have LIC group insurance, what would be the amount in case of death or disablement?

Regards,
:roll:

After the amendment in 2010, the EDLI limit was enhanced from Rs. 60,000 to Rs. 100,000. The details are as under.

EDLI Overview

EDLI is the abbreviation of Employees' Deposit Linked Insurance Scheme. Here, the deposit means the average deposit in EPF. When an employee dies while in service, the family will receive some compensation based on his/her deposit. To claim, the employer has to pay 0.5% as its premium.

Determination of Deposit

The average deposit of the last twelve months as well as the total service will be calculated, and whichever is less will be taken for the calculation.

Determination of Compensation

Up to Rs. 50,000, the employee will receive the actual amount. Beyond the first Rs. 50,000, they will receive 40% of the rest, subject to a ceiling of Rs. 100,000.

For example:
- **Deposit Rs. 100,000**
- For the first Rs. 50,000 - Rs. 50,000
- Next Rs. 50,000 - Rs. 20,000
- Total - Rs. 70,000 (will receive the full amount as it does not exceed Rs. 100,000).

- **Deposit Rs. 200,000**
- For the first Rs. 50,000 - Rs. 50,000
- Next Rs. 150,000 - Rs. 60,000
- Total - Rs. 110,000 (will receive Rs. 100,000 only as it exceeds Rs. 100,000).

- **Deposit Rs. 300,000**
- For the first Rs. 50,000 - Rs. 50,000
- Next Rs. 250,000 - Rs. 100,000
- Total - Rs. 150,000 (will receive Rs. 100,000 only as it exceeds Rs. 100,000).

However, there are better insurance schemes with the same premium, even without considering the deposits. Some organizations are exempted from EDLI and instead provide better benefits in lieu of EDLI. There are schemes that specify more than Rs. 100,000 for natural death and double benefits for accidental death.

Regards,
Abbas.P.S, ITI Ltd, Palakkad 678 623.

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