Employees Deposit Linked Insurance (EDLI) Scheme

19.10.2024

Employees Deposit Linked Insurance (EDLI) Scheme

Why in the news?

The Centre has decided to extend providing benefits of Employees’ Deposit Linked Insurance (EDLI) Scheme to all subscribers of Employees’ Provident Fund Organisation and their family members till further notice.

About Employees Deposit Linked Insurance (EDLI) Scheme:

• It is an insurance scheme that was launched by the Government in 1976.
• This scheme was launched with the objective of providing social security benefits to the employees of the private sector for whom such benefits were not commonly provided by the employer.
• This scheme is managed and administered by the Employees Provident Fund Organisation (EPFO), and the scheme provides term life insurance cover on the life of the member employee.
• This scheme covers all organizations registered under the Employees Provident Fund (EPF) and Miscellaneous Provisions Act, 1952.
• This scheme works in combination with the EPF and the Employees' Pension Scheme (EPS).
• The extent of the benefit is decided by the last drawn salary of the employee.
• The registered nominee of the EDLI scheme receives a lump-sum payment in the event of the death of the EPF member, during the period of the service.
• The nominee registered in the EDLI is the same as registered in the EPF Scheme.

Features of the Employees Deposit Linked Insurance (EDLI) Scheme:

• Maximum assured benefit up to Rs 7 lakh to be paid to the nominee or legal heir of the EPF member if death occurs while in service.
• Minimum assurance benefit is of Rs 2.5 lakh in case the deceased member was in continuous employment for 12 months prior to his or her death.
• This life insurance benefit being given to the EPFO member is free of cost for the PF/EPF account holders.
• Minimal contribution by employer at 0.5% of employee's monthly wages, up to wage ceiling of Rs 15,000; no contribution made by employee.
• Auto-enrolment of PF members in the EDLI scheme.
• Benefit directly credited to the bank account of a legal heir or nominee.

                                                                            Source: The Hindu

Consider the following statements regarding the Employees Deposit Linked Insurance (EDLI) Scheme:

1. It is managed and administered by the Employees' State Insurance Corporation (ESIC).

2. The maximum assured benefit that can be paid to the nominee or legal heir under the EDLI scheme is Rs.20 lakhs.

Which of the statements given above is/are correct?

A.1 only

B.2 only

C.Both 1 and 2

D.Neither 1 nor 2

Answer D