EDLI is the abbreviation of Employees' Deposit Linked Insurance Scheme. Here deposit means the average deposit in EPF. When an employee dies while in service, the family will get some compensation based on his/her deposit. To get the 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 total service will be calculated, and whichever is less will be taken for the calculation.
Determination of Compensation:
Up to Rs. 50,000/-, he will get the actual amount. Beyond the first Rs. 50,000/-, he will receive 40% of the rest; subject to a ceiling of Rs. 100,000/-.
Example a) Deposit Rs. 100,000
For the first 50,000 - 50,000, Next 50,000 - 20,000
Total - Rs. 70,000 (will receive the full amount as it does not exceed 100,000).
Example b) Deposit Rs. 200,000
For the first 50,000 - 50,000, Next 150,000 - 60,000
Total - Rs. 110,000 (will receive Rs. 100,000 only as it exceeds 100,000).
Example c) Deposit Rs. 300,000
For the first 50,000 - 50,000, Next 250,000 - 100,000
Total - Rs. 150,000 (will receive Rs. 100,000 only as it exceeds 100,000/-)
However, there are better insurance schemes with the same premium, even without considering the deposits. With these types of better benefits, some organizations are exempted from EDLI. Instead, they provide benefits in lieu of EDLI. There are schemes that specify more than Rs. 100,000/- for natural death and double benefits for accidental death.
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