The Employees’ Deposit Linked Insurance Scheme (EDLI) is a statutory group life insurance scheme, notified in 1976, that provides a lump-sum assurance benefit to the nominee of an employee who dies while in service. It was introduced under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, to provide a social security safety net for private-sector employees who lacked such benefits.
The scheme works by automatically covering every member of the Employees' Provident Fund (EPF). The employee contributes Nil. Instead, the employer funds the scheme by contributing 0.5% of the employee's wages, subject to a maximum wage ceiling of ₹15,000 per month, which translates to a maximum contribution of ₹75 per month. The EDLI scheme is intrinsically linked to the EPF and the Employees' Pension Scheme (EPS). An informed reader should know that an employer can opt out of the EDLI scheme under Section 17(2A) of the EPF Act, provided they offer a private Group Term Life policy with equal or better benefits.
The scheme has seen significant changes, notably the enhancement of the assurance benefit. The maximum benefit was increased from ₹6 lakh to ₹7 lakh, and the minimum assured benefit was set at ₹2.5 lakh. This enhancement was notified via Government Gazette (GSR 299(E)) on April 28, 2021. While the EDLI Scheme, 2026 has recently replaced the 1976 rules under the Code on Social Security, 2020, the core benefit structure of a minimum of ₹2.5 lakh and a maximum of ₹7 lakh has been carried forward.