All establishments with at least ten full time permanent employees and to whom the Employee’s Provident Fund and the Miscellaneous Provisions Act 1952, applies, have a statutory liability to subscribe to the Employee’s Deposit Linked Insurance Scheme (EDLI), to provide life insurance cover for all the employees.

Under EDLI (as amended with effect from 24 th june,2000 ) the benefit is equal of the average balance of the credit of the deceased employee in the provident fund during the last 12 months, provided that where such balances exceeds `35,000 ,the insurances cover is equal to `35,000 plus 25% Of the amount over ` 35,000 subject to a maximum of `60,000.

Thus if the length of service is not adequate and/or the salary is low, the average balance may be much less and the benefit to the employee’s family is very little.

So what does it mean?

Using the example of an employee earning `10,000 as basic salary per month, the PF contribution is Rs 2,400 per month (1,200 from employer +1,200 from employee). The average balance in the last 12 months therefore would be Rs 15,600 [i.e.(2400x1+2400x2+2400x3+……+2400x12)/12]

Thus this employee’s family on his death would receive `15,600 as the EDLI benefit for the premium of Rs .600 (0.5% of this basic salary) paid towards it in the last 12 months, assuming the salary has not changed in the same period.

Reliance Life Insurance Group Term Life In Lieu of EDLI

Under Section 17(2A)of the act, the Employer may be exempt from contributing to this scheme, if he/she has provided for better insurances benefits than the cover offered by the Employee Provident Fund Organization (EPFO) through a life insurer. Reliance Life Insurance Group Term Life in Lieu of EDLI has been approved by the Central Employee Provident Fund Organization as a better alternative.

The benefit we provide under this scheme is a minimum of `62,000 and a maximum of `1,50,000.

A Double Accident Benefit rider can also be provided .

	Disclaimer
	UIN for Reliance Group Term Insurance Plan (EDLI) - 121N006V01.