Understanding EDLI Benefits: How Much Will Nominees Receive Under EPF?

Clarification on EDLI Benefits Under the EPF Scheme

Please clarify the concept of EDLI benefits under the EPF scheme. If an employee has completed 3 years of service and their basic salary is 6500, how much benefit should be received by their nominee in the case of the employee's death?

Regards,
Mahender

Dear Mahender, All employers to whom the Employee's Provident Fund and Miscellaneous Provisions Act, 1952 applies, have a statutory liability to contribute to the Employee's Deposit Linked Insurance Scheme, 1976, to provide the benefit of life insurance to all their employees.

Scheme Amendments Effective from 18th June, 2010

a) Insurance benefit is the average balance of the Provident Fund during the last 12 months (provided that such balance does not exceed Rs.1,00,000/- INR).

b) Insurance cover would be equal to Rs.50,000 plus 40% of the amount in excess of Rs.50,000, subject to a maximum of Rs.1,00,000.

c) The contribution @ 0.50% of each employee's salary is payable by the employer to the Provident Fund Authorities.

Examples

a) If PF deposit is Rs.50,000, EDLI Benefit – Rs. 50,000

b) If PF deposit is Rs.1,00,000, EDLI Benefit – Rs.70,000 (50,000+20,000)
(For the first 50,000 – 50,000, Next 50,000 – 40% of 50,000 i.e., Rs.20,000)

c) Deposit Rs.2,00,000, EDLI Benefit – Rs.1,00,000 (50,000+50,000)
(For the first 50,000 – 50,000, Next 1,50,000 – 40% of 1,50,000 i.e., Rs.60,000 - Total - Rs.1,10,000, but will get Rs.1,00,000 only as it exceeds 1,00,000).

Hope this is clear to you.

Regards,
Avinash K.

The maximum limit of EDLI is Rs. 130,000/-, i.e., 20 months of Basic Pay or the lesser pay the nominee/legal heir will receive from EDLI.

Understanding EDLI Contributions and Coverage

EDLI is a kind of insurance policy provided by EPFO. In this scheme, the employer contributes 0.5% of the employee's Basic + DA into the EDLI scheme, and 0.01% as an administration charge to maintain EDLI with EPFO.

If an employee is under the EPF Act, then he/she has to be insured by EDLI unless the employer proves that they can provide a better insurance policy than what EPFO offers.

If an employee has Basic + DA exceeding Rs. 6500 (let's say Rs. 8000), the employee will contribute 12% of Rs. 8000, but the employer has to contribute 13.61% (3.67% + 8.33% + 1.1% + 0.5% + 0.01%) only on Rs. 6500. There is no need for the employer to contribute on Rs. 8000.

In addition to the post of Mr. Bhaskar, calculations need to be done based on the actual basic pay and are subject to a maximum of EDLI Basic, i.e., 6500.

Regards,
Pushkar

To claim the EDLI benefit, the main criterion is that the death must have occurred while in service. In this instance, if the death occurred while in service and the individual had served with the same employer for 12 months, then the benefit would be ₹1,30,000.

Dear Sir, for receiving the EDLI benefit, is a natural death necessary? Also, what is the timeline for receiving the benefit?

Dear sir, for getting EDLI benefit, is natural death necessary? And what is the timeframe for receiving the benefit?

There is no time limit. The only condition is that death must have occurred while in service.

Regards

It's a very good benefit for employees. Thank you a lot. But is it compulsory in every organization to have such kinds of deductions?

If you are a PF member, it is compulsory. It may be noted that the EDLI contributions are paid by the employer, and no contribution is payable by the employee separately.

Regards,
Pradheep

Any change or increase in the amount in case of death under EDLI? Kindly suggest.

My Query:

1. The current limit for EDLI is 360,000 in PF. In the event of an employee's death, what amount will they receive as the EDLI benefit?
2. How is it calculated? Please explain with an example.

Thanks
Regards

Sir,

What is the minimum service period required to get EDLI benefit in the year 2000? The death occurred in November 2000 (i.e., August 2000 to November 2000). Please reply.

Thanks

Please explain the EDLI calculation.

Thanks,
Ashutosh
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