Employees Deposit Linked Insurance
The employees who have joined the Employees’ Provident Fund are covered by the EDLI or Employee’s Deposit Linked Insurance Scheme, 1976 which provides a lump sum payment to the insured’s nominated beneficiary in the event of death caused due to illness, natural causes or accident.
We know to realize that the socio-economic condition of people living in India traditionally had higher unemployment rates. If somebody in a family gets a job, then most of the time the rest of the family members become economically dependent upon him/her. Therefore, Government of India has come up with the Employees Deposit Linked Insurance (EDLI) scheme which helps the employees’ family members by providing the financial assistance they need in the case of the death of the employee.
The main objective of EDLI was to put a system to provide employees families with income security after the death of the member. It was funded through contributions by the employer and central government with no contribution by the employee. EDLI scheme provides for a lump sum payment to the insured’s nominated beneficiary in the event of death due to natural causes, illness or accident.
The Benefit of EDLI during the death of Employee
The EDLI scheme provides a monetary benefit to the nominated family members based on his last twelve monthsaccount balance and average salary and in the event of the death of the employee.
Contribution in EDLI
The contribution of an employer towards his/her employee and the government depends upon employee’s monthly basic wages, dearness allowance including cash equivalent of food compensation and retaining allowances if any actually drawn amid the month.
The Fund Accounts
There are two types of funds Accounts, one is The Insurance Fund Central Administration Account and the other one is Deposit-Linked Insurance Fund Account which shall be created for the purpose of running the scheme.
The contribution under EDLI scheme is as described below:
- EDLI calculated as described above is required to be rounded to the nearest rupee.
- The contribution of EDLI will only be payable in the case of an elderly member who crossed fifty-eight years age and pension contribution for him is not payable as per act. As long as the member is a member is in service the EDLI contribution has to be paid.
In the event of the death of an employee, the persons who are legally deemed to receive the accumulated provident fund in the name of deceased will receive an amount in EDLI scheme depending upon the average of preceding 12 months’ salary and balance in the fund account of the deceased.In the event that the deceased had not finished a year, at that point his normal adjust the amid time of enrollment will be considered for the obsession of extra advantage to his beneficiaries.
Employees’ Deposit Linked Insurance or EDLI is a method of ensuring successful insurance benefit to employees, where the insured employee’s nominated beneficiary receives a huge amount of payment in event of their death due to any cause. These are the main reason why EDLI scheme is very important for every employee to help secure their future or their family’, an event of their absence.