What does financial security mean for you and your loved ones? The Employees’ Deposit-Linked Insurance (EDLI) Scheme is a vital safety net for employees in India, ensuring their nominees receive life insurance benefits. On 18th July 2025, the Government of India rolled out significant amendments to the scheme, published in the Official Gazette under G.S.R. 476(E). These updates, effective immediately, strengthen the framework under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
What Is the EDLI Scheme?
Before exploring the amendments, reflect: what’s the purpose of a scheme like EDLI?
Managed by the Employees’ Provident Fund Organisation (EPFO), the Employees’ Deposit-Linked Insurance (EDLI) Scheme provides a lump-sum insurance benefit to the nominee of an employee who passes away during service.
Key Features:
- Who funds it? Employers contribute 0.5% of the employee’s basic salary.
- Who’s eligible? Employees with 12 months of continuous service.
- What’s the benefit? A lump-sum payment to the nominee upon the employee’s death.
EDLI Scheme 2025: 3 Major Amendments
The 2025 amendments introduce three pivotal changes. As you read, consider: how might each update affect employees, nominees, or employers?
Also Read.
1. Minimum Assurance Benefit of ₹50,000
Previously, nominees received only the average PF balance if it was below ₹50,000. Now, a minimum benefit of ₹50,000 is guaranteed, even if the PF balance is lower.
2. Gaps in Employment Up to 60 Days Will Be Ignored
Before, any employment break reset the 12-month continuous service requirement. The new rule ignores gaps of up to 60 days, treating the service as continuous.
3. Coverage Extended for Death Within 6 Months of Last PF Contribution
Previously, only employees actively on the rolls were eligible. Now, nominees can claim benefits if the employee passes away within 6 months of their last PF contribution, provided they were still on the rolls.
How Do These Changes Benefit Employees and Employers?
For Employees:
- A ₹50,000 minimum benefit ensures financial support for nominees, even with low PF balances.
- The 60-day gap rule makes eligibility more inclusive.
- 6-month extended coverage protects families in cases of recent job changes or leaves.
For Employers:
- Clearer rules simplify compliance.
- Better benefits boost employee morale.
- Enhanced reputation through stronger employee welfare.
EDLI Claim Process for Nominees: What’s Changed?
The claim process remains largely unchanged, but expanded eligibility means more nominees can benefit.
Steps to File an EDLI Claim:
- The nominee submits a claim form to the employer.
- The employer forwards it with documents to the EPFO.
- The EPFO verifies and processes the payment directly to the nominee.
What If the Employer Hasn’t Paid EDLI Contributions?
If EPF contributions were made regularly, nominees may still be eligible. The EPFO can recover unpaid EDLI amounts from the employer, including interest and penalties.
What Should Employers Do Now?
- Update HR systems for the 60-day gap rule and 6-month coverage.
- Train staff on new eligibility criteria.
- Communicate clearly to employees.
- Ensure compliance to avoid penalties.
- Maintain records for efficient claim settlements.
Conclusion
These changes bring more flexibility and assurance under the EDLI scheme. With enhanced eligibility and a stronger support system, both employees and employers can feel more secure in the financial protection offered through this essential scheme.