Most salaried employees in india know that contributing to the Employees’ Provident Fund Organisation (EPFO) helps build retirement savings. But few people realise there’s also a free life insurance cover of up to ₹7 lakh built into their PF account — called the Employees’ Deposit Linked Insurance (EDLI) Scheme.

🛡️ What Is the EDLI Insurance Scheme?

The Employees’ Deposit Linked Insurance (EDLI) Scheme is a life insurance benefit linked to your EPF membership.

✔ Who it covers:
All employees with an active EPF account under EPFO are automatically enrolled — no separate registration or premium payment required.

✔ Who pays the premium:
The employee doesn’t pay any premium. The employer contributes 0.5 % of basic salary and dearness allowance toward this insurance every month (capped at ₹75 per month).

✔ When it applies:
This insurance applies while you are in service — not after retirement or after you leave the job.

💰 How Much Insurance Cover Can You Get?

Under the EDLI scheme:

📌 Maximum Benefit

You can get up to ₹7 lakh as insurance cover in case of your death during active service.

📌 Minimum Benefit

Even if you have just worked a short period, the minimum payout under the scheme is ₹2.5 lakh.

📌 How the Amount Is Calculated

The insurance payout is based on:

• Your average salary (basic + DA) over the last 12 months, and
• A fixed bonus component that enhances the total cover.
  Once calculated, the amount is subject to a maximum cap of ₹7 lakh.

📍 For example:
If your average basic + DA is ₹15,000 per month, the formula usually works out to (35 × average salary) + bonus, which can reach the ₹7 lakh cap.

🤔 Do You Have to Pay Extra for This?

No — it’s free for you.
You don’t pay premiums or apply separately. Once you’re part of the EPF system, you’re automatically covered under EDLI.

👨‍👩‍👧 Who Gets the Money When You Pass Away?

The insurance payout goes to your nominee (the person you have registered on your EPF account). If you haven’t registered a nominee, the benefit can be claimed by your legal heirs such as:

• Spouse
• Unmarried daughters
• Sons up to a certain age limit

These heirs need to provide the required documents (like death certificate, bank details, and succession/guardianship certificates) to claim the insurance.

📑 Important Things to Know Before Claiming

✔ It applies only if you die while in active employment with an EPF account.
✔ After leaving the job or after retirement, EDLI cover is not available.
✔ Claims are usually processed within approximately 30 days once the paperwork is submitted.
✔ If there is a delay in claim settlement, EPFO is liable to pay interest on the amount.

🔍 Why Many Employees Don’t Know About It

Despite being a significant benefit, many EPFO members overlook this scheme because:

• PF is often seen only as retirement savings, not as an insurance asset.
• Many employees are unaware of the EDLI scheme name and coverage.
• Nomination is sometimes forgotten — without a nominee, the claim process becomes complicated.

🧠 Summary: Hidden EPFO Benefit You Shouldn’t Miss

Feature

Details

Scheme Name

Employees’ Deposit Linked Insurance (EDLI)

Coverage

Free life insurance when EPFO member dies while in service

Maximum Benefit

Up to ₹7 lakh

Minimum Benefit

₹2.5 lakh

Premium

₹0 (employer pays)

Claim Payment

Lump‑sum to nominee/legal heirs

📌 In short: If you are a contributor to the EPF, you are already eligible for a free life insurance cover of up to ₹7 lakh — but many people never claim or even know about this valuable benefit

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.