A complete EDLI guide
The socio-economic condition of India traditionally had higher unemployment rates. If one person in a family gets a job rest of the family members become economically dependent upon him. When that person retires, the entire family lives on his Pension. Employees’ Deposit Linked Insurance (EDLI) Scheme helps the dependent family member by extending financial assistance in case of accident or death of an employee.
EDLI benefit on death
As per this scheme, ‘Assurance benefit’ or monetary benefit will be payable to the dependent or nominated family members based on his last twelve months account balance and average salary and in the event of a death of the employee.
The monthly contribution towards the employee by the employer and the government depends upon employee’s dearness allowance, basic wages, including cash equivalent of food compensation and retaining allowances if any actually drawn during the month.
The Fund Accounts
There are two accounts such as The Insurance Fund Central Administration Account and Deposit-Linked Insurance Fund Account shall be created for the purpose of running the scheme. All the EDLI admin charges are credited to The Insurance Fund Central Administration account and the related expense is also met from this account.
The contribution under EDLI scheme is as described below:
- EDLI calculated as described above is required to be rounded to the nearest rupee.
- EDLI contribution is payable even if an elderly member crossed fifty-eight years age and pension contribution for him is not payable as per act. As long as the member is in service the EDLI contribution has to be paid.
Updated rates of contribution for different schemes:
|Minimum number of Employee in employment||Contribution||Scheme|
|Employees Provident Fund (EPF)|
|Employees’ Pension Scheme (EPS)|
|20 employee||Employer: 0.5%
|Employees Deposit Linked Insurance Scheme (EDLI)|
In case of death of any employee, the persons who are legally entitled to receive the provident fund accumulated in the name of deceased will receive an amount in EDLI scheme depending upon the average of preceding 12 months’ salary and balance in the fund account of the deceased. If the deceased had not completed 12 months, then his average balance during the period of membership will be considered for fixation of additional benefit to his heirs.
Conclusion: Employees’ Deposit Linked Insurance or EDLI is a method of ensuring successful insurance benefit to employees, where the insured employee’s nominated beneficiary receives a huge amount of payment in event of their death due to any cause. This is why EDLI is important for every employee to help secure their future or their family’, an event of their absence.