Imagine grappling with the unexpected loss of someone dear to you and the financial burden of surviving without them. The EDLI scheme for deposit-linked insurance, released in 1976 and set to come back in 2025, is a great opportunity for employees in the private sector of India. Employees claim funds with the EPFO and directly receive insurance funds to address their financial emergencies, earning a lump sum death benefit while quitting their job. EDLI 2025 is a more encompassing scheme as of late, but now provides better features. In this article, we will analyse the impact this scheme has on employees and their dependants.
EDLI Scheme Objectives
As long as the employees are enrolled with EPF, the EDLI scheme covers employment benefits as a form of term life insurance. It is a compulsory insurance coverage for all employers provided for in the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. An insured member within the employment period entitled to claim departure benefits will leave a soothing amount of paying benefits to their nominee. This scheme is supported with EPF and the Employees’ Pension Scheme (EPS), forming a social security system.
Major Changes And Updates For 2025
On July 18, 2025, the Ministry of Labour and Employment announced crucial modifications to the EDLI Scheme which became effective from July 19, 2025. As reported in the Official Gazette, these modifications seek to enhance the scope and level of assistance. The minimum assurance benefit has been revised to ₹50,000 ensuring that nominees would receive, at minimum, ₹50,000 even if the employee’s PF balance is lesser. This change helps low-income workers the most.
Wider Inclusion
The 2025 changes widen EDLI’s scope. Employees who die within 6 months from the last PF deduction and are still on the company payroll are entitled to benefits. Further, up to 60 days of break from work will now be added to the period of continuous service. This is helpful to contractual and temporary employees, so that they are not excluded on account of short employment gaps.
How The Payout Works
The method of calculating the payment still retains its simplicity yet remains powerful. The benefit is 35 times the average monthly salary from the last 12 months, which is capped at ₹15,000, plus a bonus of ₹1.75 lakh. The maximum payout is ₹7 lakh while ₹50,000 is the minimum. This helps ensure that the family is supported, not just the employee.
Compliance And Contributions From The Employer
Within the EDLI Scheme, the employer is obligated to contribute 0.5% of the employee’s basic salary, which is capped at ₹75 per month. Since there is no employee contribution, the employee receives this benefit at no cost. Employers have the option to purchase alternate group insurance policies, so long as the coverage is equal to or greater than the EDLI benefits. There are consequences for not complying, such as fines or the EPFO reclaiming unpaid contributions to secure benefits for eligible claimants.
Simplified Claim Processes
The processes to claim EDLI benefits are straightforward. Nominees complete Form 5 IF and submit it with the death certificate and a cancelled cheque to the employer, who then forwards it to the EPFO. The EPFO does not verify the claim and transfers the funds directly to the nominee’s bank account. Fast submission combined with accurate employer record keeping accelerates settlement processing, which is vital for bereaved families to receive funds with minimal delays.
EDLI’s Importance
The EDLI Scheme 2025 underscores India’s dedication to social security. It now covers all EPF members irrespective of geographical constraints, which brings relief. Families enduring job changes or losses will benefit the most from the recent amendments, alleviating financial burdens and providing stability, which makes it vital during critical times.
Overview Of EDLI Scheme
| Aspect | Details |
|---|---|
| Launch Year | 1976 |
| Administered By | Employees’ Provident Fund Organisation (EPFO) |
| Minimum Benefit | ₹50,000 (effective July 19, 2025) |
| Maximum Benefit | ₹7,00,000 |
| Employer Contribution | 0.5% of basic salary, up to ₹75/month |
| Employee Contribution | None |
| Eligibility | All EPF members, including those with up to 60-day job breaks |
| Coverage Period | During service or within 6 months of last PF contribution (if on payroll) |
| Claim Process | Submit Form 5 IF, death certificate, and canceled cheque via employer to EPFO |
Also Read: Income Tax Rules 2025: Key Changes Taxpayers Should Know