EDLI – Employees Deposit Linked Insurance Scheme

Understand how EDLI scheme can help private sector employees.
3 min

The Employees Deposit Linked Insurance Scheme (EDLI) is an insurance plan that was launched by the Government in 1976. This scheme was launched with the objective of providing social security benefits to private sector employees, for whom such benefits were not commonly provided by the employer. Today, the EDLI scheme is managed and administered by the Employees Provident Fund Organisation (EPFO), offering term life insurance cover.

What is EDLI scheme?

EDLI is an insurance plan offered by the Employees Provident Fund Organisation (EPFO) specifically for private sector salaried employees who are EPFO members. Introduced in 1976, the scheme provides a lump-sum payment to the registered nominee if the insured employee passes away while still employed.

The EDLI scheme applies to all organisations registered under the Employees' Provident Fund and Miscellaneous Provisions Act of 1952. These organisations must participate in the scheme to provide life insurance coverage for their employees. It's important to note that the EDLI scheme functions alongside the Employees' Provident Fund (EPF) and the Employees' Pension Scheme (EPS).

It is important to remember that EDLI is an insurance product, focused on protection in the event of an employee's death. For growing your savings with a predictable return, fixed deposits (FDs) offer a low-risk option.

How the EDLI scheme works

Organisations that qualify for the Employees' Provident Fund (EPF) automatically become eligible for EDLI. Every month, your employer contributes to the EDLI scheme alongside their regular EPF contributions. Here's how their contribution is divided:

  • Employee contribution: 12% of your basic salary + dearness allowance goes to your EPF account.
  • Employer contribution: 12% of your basic salary + dearness allowance, divided as follows:
    • 3.67% to your EPF Account
    • 8.33% to the EPS (Employees' Pension Scheme), capped at a maximum of Rs. 1,250
    • 0.50% to the EDLI Account, capped at a maximum of Rs. 75

Employers have options when it comes to providing life insurance for their employees. They can choose a group life insurance plan as an alternative to EDLI, as long as the coverage amount is at least equal to the EDLI benefit. Additionally, employers can opt-out of the EDLI scheme altogether. However, if they do not have a separate group life insurance plan, they have the option to increase their EDLI contributions up to a maximum of Rs. 15,000 per month.

You can book a Bajaj Finance FD, with minimum investment of Rs. 15,000 and earn interest of up to 8.85% p.a.

Key features of the Employees Deposit Linked Insurance Scheme

Here are some important things to know about EDLI:

  • EDLI contributions are made entirely by your employer, placing no financial burden on employees.
  • As part of the EPF scheme, EDLI automatically covers all employees who have an EPF account.
  • The EDLI scheme provides a lump-sum payment to the registered nominee in the event of the insured employee's death during service. This death can occur anytime and anywhere for the benefit to be claimed.

How the EDLI benefit is calculated

The EDLI scheme provides a payout upon the death of an insured employee. Here's how it's determined:

1. Base calculation: The benefit starts with 30 times the average monthly salary the employee earned in the 12 months before their death. This amount is capped at a maximum of Rs. 15,000.

2. Bonus: An additional bonus of Rs. 2.5 lakhs (increased from Rs. 1.5 lakhs in September 2020) is added to the benefit.

  • Let say your salary is above Rs. 15,000
    If an employee earned more than Rs. 15,000 per month, the maximum base amount (30 * 15,000) is used, resulting in a benefit of Rs. 450,000 + Rs. 2,50,000 bonus = Rs. 7 lakh.
  • Let say your salary is below Rs. 15,000
    If an employee earned Rs. 10,000 per month, the calculation is (30 * 10,000) + Rs. 2,50,000 bonus = Rs. 5.5 lakh.

How to claim EDLI benefits

Here is the process for receiving the EDLI payout:

  • The benefit can be claimed by the employee's registered nominee. If no nominee exists, family members or legal heirs can apply.
  • The deceased employee must have been actively contributing to the EPF scheme at the time of their death.
  • Download and fill out EDLI Form 5 IFcto initiate your claim.
  • Your claim form must be signed and certified by your employer.
  • If your employer is unavailable or unable to sign, you can have the form attested by any of the following:
    • Bank manager (of the branch where the deceased held an account)
    • Local MP or MLA
    • Gazetted Officer
    • Magistrate
    • A member, chairman, or secretary of a local municipal board
    • Postmaster or sub-postmaster
    • Member of a regional committee of EPF or CBT
  • Submit the completed EDLI claim form (Form 5 IF), along with any required supporting documents, to the regional EPF Commissioner's Office.
  • You can also submit Forms 20 (for EPF withdrawal) and 10C/D (for EPS withdrawal). This allows you to claim benefits from all three schemes (EPF, EPS, and EDLI) at once.
  • Submit any additional documents requested by the EPF office, to speed up the claim process.
  • Once approved, the EPF commissioner has 30 days to release the payment. If payment is delayed, the claimant is entitled to 12% annual interest until the funds are disbursed.


The EDLI scheme is a valuable safety net for families of private-sector employees. Its automatic inclusion with the EPF offers peace of mind, knowing that financial support will be provided in the event of an employee's death. It is essential for employees and their families to understand the EDLI benefits, eligibility requirements, and the steps involved in making a claim.


As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.