Employees Deposit Linked Insurance Scheme (EDLI Scheme): Free Insurance of Rs 7 lakh

EDLI Scheme: Companies function well when the organization and their rules are taken care of happiness, and benefits of the employees who are working with them, these beneficial efforts affect the service given by the employees of the company and at the end the company’s performance gets better in the market. Most employees have a liability to avail the Employee’s Deposit Linked Insurance Scheme of 1976 through which Life Insurance is provided to all employees.

However, if the said employer has provided better insurance advantages via other schemes, the employer may be exempted from contributing to the Insurance Scheme of 1976. One of the better alternatives that could be utilized by the employer is the Exide Life Group Term Life in lieu of Employees’ Deposit Linked Insurance Scheme (EDLI Scheme).

What is meant by EDLI?

EPFO-EDLI Scheme: Employees Provident Fund Organization (EPFO) gives benefits of Life Insurance to its crores of account holders in addition to Employees Pension Scheme (EPS). All EPFO ​​members are entitled to a free life insurance cover of Rs 7 lakh under the Employees’ Deposit Linked Insurance Scheme (EDLI) of the retirement fund body. This government scheme is very useful. This is because in this scheme the employees do not have to pay any kind of premium.

This plan provides a higher Sum Assured and also requires a lower premium amount. This plan also ensures that claim settlements are done a lot more quickly. In addition to all of this, employers can also avail income tax benefits. Through this plan, both employers and employees can procure a number of benefits. This plan can be availed by all members of a Provident Fund scheme in the said company. Employees Deposit Linked Insurance Scheme EDLI is an insurance cover provided by the Employees Provident Fund Organization for private sector salaried employees.

The registered nominee receives a lump-sum payment in the event of the death of the person insured, during the period of the service. EDLI applies to all organizations registered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952. All such organizations must subscribe to this scheme and offer life insurance benefits to their employees. This scheme works in combination with EPF and EPS. The extent of the benefit is decided by the last drawn salary of the employee. With effect from 28.04.2021, the EPFO has increased the maximum benefit to Rs.7 lakh for the registered nominees of the deceased member.

The Ministry had increased the minimum amount of benefit to Rs.2.5 lakh on Feb 2018 for two years. However, the EPFO has further decided to continue with the same minimum benefit of Rs.2.5 lakh with retrospective effect from 15th Feb 2020. Also, with effect from 28.04.2021, the EPFO has extended the benefit to the nominees of the deceased member who have changed their establishment for employment within a period of 12 months preceding the month of their death.

Features of the EDLI Scheme

EDLI applies to all employees with a basic salary under Rs. 15,000/- per month. If the basic salary goes above Rs. 15,000 per month, the maximum benefit is capped at Rs. 7,00,000/-.

  • There is no need for the employees to contribute to EDLI. Their contribution is required only for EPF.
  • There is a bonus of Rs. 2.5 lakh  available under the EDLI.
  • Any organization that has more than 20 employees needs to register for EPF.
  • Any employee who has an EPF account automatically becomes eligible for the EDLI scheme.
  • There are no exception to the insurance coverage provided by EDLI. It protects the insured person round the clock, all around the world.
  • An employer can opt for another group insurance scheme, but the benefits offered must be equal to EDLI.
  • The contribution of an employer must be 0.5% on the basic salary or a maximum contribution is capped at RS. 75 per employee per month. If capped at RS. 15,000/- per month.
Grace PeriodFor monthly mode of payment, 15 days is the grace period that is offered and for quarterly and semi-annual mode of payment, 30 days is the grace period offered. This amount of time is from the due date of premium payment. In case the payment mode is annual, there is no grace period applicable. In case of insured member’s untimely demise during grace period, the death claim will be payable based on the receipt of unpaid premium.
Free Look PeriodCustomers have the option of cancelling the policy by writing to the company along with reasons within a period of 15 days from date of receipt of policy document.
NominationNomination with regards to this policy should be in agreement with all provisions of Section 39 of the Insurance Act of 1938.
LoanLoan is not applicable under this policy.
Surrender BenefitSurrender benefit is not applicable under this policy.
Maturity BenefitMaturity benefit is not provided for this policy.

Documents required

  • Death certificate of the insured person.
  • Duly completed form 5 IF
  • Succession Certificate in case the legal heir files the claim
  • Guardianship Certificate in case the legal heir files the claim is filed on behalf of a minor by a person other than the natural guardian.

Eligibility

  • This plan can be availed by companies for their employers who are members of a Provident Fund Scheme. In order to avail this plan, they will have to meet the following eligibility criteria
  • Minimum age: Same as that of Provident Fund Scheme
  • Maximum age: Same as that of Provident Fund Scheme

EDLI Calculation

The employee contribution is deducted from the salary before they credit the salary. Employees themselves need not make any direct payment to these schemes.the contribution from EPF employeris calculated 3.67% and 8.33% and 0.50% from the  EPS and EDLI employees.

Purpose of the EDLI Scheme

is to offer financial security to the family members of the policyholder (deceased person). Family members mean spouse, unmarried daughter or male child up to 25 years of age. The employee cannot choose which of the three schemes, EPF, EPS or EDLI, that he/she wants to opt for, but they are transferable with any change in the job.

How the employees get benefit from the scheme

Benefits under the scheme differ for employers and employee. These benefits are listed below:

Benefits in income tax

Premiums that are paid by the employer is eligible for tax benefits as they are looked upon as normal business expenses for the purpose of Income-Tax. Additionally, claim amount that is being paid under the scheme will be exempt from tax based on Section 10() (d) of Income Tax Act of 1962.

Other Benefits

Individuals can obtain Life Insurance plans from the official websites. process going very easily as they have the option to apply online. The Self-Service portal is one of the unique advantages given by this company. Through this feature, individuals can download their premium certificate, check the amount that they have not claimed yet, change their contact details and also make top-up payments on their policies.

Other than this, Exide Life also provides features such as investment calculator, risk analyser, calculator for medical costs. These features are exceedingly convenient as well. In addition to the above, ‘Meet an Advisor’ is an option that can be availed in case individuals require advice regarding their insurance policies. This company is also active on social media.

EDLI claim procedure

Eligible persons can claim EPF life insurance amount, the process to apply for EDLI scheme is explained in detail below.

Note: EDLI claim can be made only if the deceased individual was actively employed at the time of death.

Step 1:The application form should be duly filled in the prescribed format.

Step 2: The claim application must be Attested by the employer

If the employer is not available to verify the application form, the validation can be done with any of the following officers:

  • Gazetteed officer
  • village panchayat president
  • Magistrate
  • President/Secretary/Member of Municipality or District Local Board
  • MP or MLA
  • postmaster or sub postmaster
  • bank manager concerned
  • Member of CBT or regional committee of EPF

Step 3: Attested copy of application form along with all the supporting documents need to be submitted to the commissioner

Step 4: After the verification of the application form and supporting documents, the commissioner will clear the EDLI claim amount. The amount of EDLI scheme will be deposited directly into the account of the benefit.

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