Understanding the Employees' Deposit Linked Insurance Scheme (EDLI)
EDLI is the abbreviation for the Employees' Deposit Linked Insurance Scheme. Here, "deposit" refers to the average deposit in the EPF. When an employee dies while in service, the family receives compensation based on the employee's deposit. To claim this, the employer must pay 0.5% as a premium.
Determination of Deposit
The average deposit of the last twelve months and the total service will be calculated. Whichever is less will be used for the calculation.
Determination of Compensation
- Up to Rs. 50,000, the employee will receive the actual amount.
- Beyond the first Rs. 50,000, the employee will receive 40% of the remaining amount, subject to a ceiling of Rs. 100,000.
Examples
- 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 benefits, some organizations are exempted from EDLI. Instead, they provide benefits in lieu of EDLI. There are schemes that offer more than Rs. 100,000 for natural death and double benefits for accidental death.
Regards,
Abbas.P.S, ITI Ltd, Palakkad - 678 623
Ph. [Phone Number Removed For Privacy Reasons]