Understanding EDLI Scheme: What Do Nominees Receive After a Member's Passing?

Benefits Under the EDLI Scheme

What are the benefits under the EDLI Scheme? Please provide in detail what the nominees/dependents will receive as benefits after the death of the member.

Calculation of Benefits

Additionally, could you explain the calculation that will be applied at that time under the EDLI Scheme?

Thank you.

EDLI Insurance Benefit Details

EDLI is an insurance benefit paid to PF members who die while in service. The benefit is linked to the provident fund amount credited, and the maximum benefit is restricted to Rs. 1,00,000/- if the employee worked with the same employer for less than 12 months. However, if an employee worked with the same employer for 12 months or more, they will be entitled to receive the benefits of the average wages for the last 12 months multiplied by 20. The maximum average wage can be Rs. 6,500 only, so the maximum benefit would be Rs. 130,000/-. The benefit will be paid to the same nominees/legal heirs who are eligible to receive the provident fund amount of the deceased member.

Regards,
Pradheep

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. EDLI is an insurance benefit that is paid to the PF members who die while in service.

As per Employees' Deposit Linked Insurance (Amendment) Scheme 2011

The method of calculation is as follows:

The higher of the below-mentioned amounts would be paid to the nominee of the deceased:

- Payout to the nominee of the deceased would be higher if the average monthly wages drawn (subject to a maximum of INR 6,500) during the 12 months preceding the month in which he died, multiplied by 20 times

OR

- An amount equal to the average balance in the PF account of the deceased during the preceding 12 months period.

If the average balance is below Rs. 50,000, Rs. 50,000 is paid.

If the average balance is above Rs. 50,000, in this case, Rs. 50,000 + 40% of the balance above Rs. 50,000, subject to a maximum of Rs. 1,00,000, is paid.

The maximum amount payable is INR 130,000.

Example

Mr. Rao was working with ABC Ltd. and died on 15th April 2011. His date of joining was 1st April 2008, and his current basic salary was Rs. 6,500 per month. His average PF balance for the preceding 12 months was Rs. 1,50,000.

Step-1: Calculation based on wages

12-month average pay = 6,500

20 times of the same = 6,500×20 = 1,30,000

Step-2: Calculation based on PF balance

Average balance in PF account = 1,50,000

Hence, 50,000 + (1,00,000×40%) = 90,000

The higher of the two, i.e., Rs. 1,30,000, is paid as a benefit.

Regards,
Avinash K.

Dear Sachin, please refer to the thread at https://www.citehr.com/472707-calcul...pf-scheme.html. There are many similar threads available on this site for your ready reference. Before posting such a query, it is advisable to conduct research by entering important keywords in the "Find Information" box located at the top of this page.

Thank you.

Earlier, every EPF member had a life coverage of a minimum of Rs 150,000 and a maximum of Rs 600,000. But according to the latest EDLI amendment 2018, which was made on 15 February 2018, the minimum life coverage of EPF members has increased to Rs 250,000. This amendment will be in force for the next 2 years from 15 Feb 2018. It is good news for all EPF members.

Earlier, every EPF member had a life coverage of a minimum of Rs 150,000 and a maximum of Rs 600,000. However, according to the latest EDLI amendment 2018, which was made on 15 February 2018, the minimum life coverage of EPF members has increased to Rs 250,000. This amendment will be in force for the next 2 years from 15 Feb 2018. This is good news for all EPF members.

Jolly Gambhir

Amendment to the EDLI Scheme

The EDLI scheme has been amended again, with the maximum EDLI payment increased to Rs. 7,00,000.

EDLI Scheme Overview

The EDLI scheme provides free insurance coverage to an employee's family members in the event of his/her death during the term of active service.

Automatic Coverage for EPF Account Holders

EDLI automatically covers all employees who have an EPF account. The employer pays the premium for the insurance, and the coverage amount is linked to the employee's PF contributions.

Coverage Amount Details

The coverage amount under the EDLI scheme can be up to a maximum of Rs. 7,00,000, and the minimum coverage amount is Rs. 2,50,000 in case of the death of the member during the service period. This death can occur anytime and anywhere for the benefit to be claimed.