EDLI FAQ answered: How much insurance benefit is paid under the new wage ceiling? Who is not eligible?

The EDLI scheme provides an insurance benefit to families after the member's death. Here's how much money is disbursed under the new wage ceiling of ₹25,000 and who is not eligible. 

Most EPF members know about the retirement savings benefits of the scheme, but many may be unaware that the membership also comes with an insurance benefit at no additional cost. The benefit is available under the Employees' Deposit Linked Insurance (EDLI) scheme and is fully funded by employers.

Linked to the Employees' Provident Fund scheme, it provides financial support to the nominee or eligible family member in the event of the employee's death during service, without requiring any separate premium payment.

How much insurance money will be given now?

Under the earlier wage ceiling of ₹15,000, EDLI provided a maximum insurance benefit of ₹7 lakh to eligible users. With wage ceiling increased to ₹25,000 from September 17, the maximum benefit is also set to rise to ₹10.5 lakh.

Here’s how the calculation changes:

• Earlier: ( ₹15,000 × 35) + ₹1.75 lakh = ₹7 lakh
• New ceiling: ( ₹25,000 × 35) + ₹1.75 lakh = ₹10.5 lakh

The EDLI benefit is based on the employee's average monthly wages over the preceding 12 months, subject to the applicable wage ceiling, along with an additional amount linked to the average EPF balance.

Employers contribute 0.5% of the basic salary towards the EDLI scheme, with no deduction from employees.

The ₹1.75 lakh component is also important in determining the final payout. If the government raises this amount as part of the EDLI rule changes, the maximum insurance benefit could increase further.