EDLI – Employee Deposit Linked Insurance Scheme

Product Liability Insurance

EDLI or Employee Deposit Linked Insurance Scheme is an important Life Insurance policy taken by a company for its employees. All employees to whom the Employee’s Provident Fund and Miscellaneous Provision Act , 1952 applies, have a Statutory liability to subscribe to Employee’s Deposit Linked Insurance Scheme, 1976 to provide for the benefit of Life insurance to all their employees. Under the scheme as amended with effect from 24th June,2000 the insurance benefit is equal to the average balance to the credit of the deceased employee in the Provident Fund during the last 12 months, provided that where such balance exceeds Rs.35,000, insurance cover would be equal to Rs.35,000 plus 25% of the amount in excess of Rs.35,000 subject to a maximum of Rs.60,000. Thus if the lenth of service is not adequate and/ or the salary is low the average balance may be substantially less and such the benefit to the employee’s family is either inadequate or non-existent.

The contribution @ 0.50% of each employee’s salary is payable by the Employer to the Provident Fund Authorities.

However, under Sec. 17(2A) of the act, the employer may be exempted from contributing to this scheme, if he/she has provided for better insurance benefits through alternative scheme.

There are many benefits of taking Employee Deposit Linked Insurance Scheme for employers as well as employees.

Benefits for Employers

1. Premium payable under this scheme is lower than the statutory contribution to be made in R.P.F.C
2. Premium can be accounted as normal business expense for the company
3. Settlement of claims is quicker as insurance companies require minimal documentation at the time of claim

Benefits for Employees

1. Employees are covered for a higher Sum Insured
2. Employees or their dependents have to follow few steps to get the claims settled

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An Employer has the choice of following add-on covers under Employee Deposit Linked Insurance Scheme.

1.Double Accidental Benefit up to the basic Sum Insured can be taken by paying some extra premium.

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Disclaimer – The policy coverage and exclusions are subject to change from time to time and also depend on insurance company. Please talk to us to know the exact terms and conditions applicable.

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