What is EDLI?

EDLI stands for Employees' Deposit Linked Insurance. It is a life insurance cover provided to EPF members under the Employees' Deposit Linked Insurance Scheme, 1976. If an employee dies while in service, the registered nominee receives a lump-sum benefit based on the average balance in the member's EPF account over the preceding 12 months, subject to a cap.

The employer contributes a small percentage of EPF wages towards EDLI. As per current EPFO rules, the contribution is 0.5% of EPF wages, with administrative charges in addition. EDLI wages are capped at the same ₹15,000 ceiling that applies to EPS, unless the employer has chosen a higher voluntary cover.

The insurance amount is calculated as 35 times the average monthly balance in the member's EPF account over the last 12 months, plus a bonus of up to ₹2,50,000. However, the total benefit is capped at ₹7 lakh. This means even if the formula produces a higher figure, the nominee receives at most ₹7 lakh.

Worked example

An employee had an average EPF balance of ₹50,000 a month over the past year. The formula gives:

| Step | Calculation | Amount | |---|---|---| | 35 times balance | 35 × ₹50,000 | ₹17,50,000 | | Bonus | As per EPFO rules | ₹2,50,000 | | Total formula | ₹17,50,000 + ₹2,50,000 | ₹20,00,000 | | Applied cap | Lower of formula and ₹7,00,000 | ₹7,00,000 |

The nominee receives ₹7 lakh because the formula exceeds the cap.

Related reading

Use the PF calculator or read the statutory deductions guide to see how PF, EPS and EDLI add up.