Employees’ Deposit Linked Insurance, 2026: All You Need to Know

The Employees’ Deposit Linked Insurance (EDLI) Scheme, 2026, is one of the key social security schemes offered to employees under the Employees' Provident Fund (EPF). Despite being a statutory scheme, many employees don’t know that they are automatically enrolled in a life insurance scheme without any extra premium.

On June 29, 2026, the Ministry of Labour and Employment officially notified the Employees’ Deposit Linked Insurance (EDLI) Scheme, 2026 under the Code on Social Security, 2020, replacing the Employees' Deposit-Linked Insurance Scheme, 1976. The EDLI Scheme is managed by the Employees' Provident Fund Organisation (EPFO). This scheme offers financial assistance to the family members of the deceased employee. The assurance benefit is provided as a lump sum payment to the nominee or eligible legal heir.

What is Employees’ Deposit Linked Insurance Scheme?

Employees' Deposit Linked Insurance (EDLI) Scheme is a statutory scheme providing life insurance benefits. The purpose of this scheme is to provide financial security to the dependents of the employee in case of the employee’s death during the course of employment.

This scheme applies to employees who are covered by the Employees' Provident Fund (EPF) or an exempted provident fund according to the provisions of the law. In case of the death of an employee while in service, the nominee or eligible dependant would get the EDLI insurance benefit along with the employee’s EPF accumulations, subject to the scheme’s conditions.

Unlike conventional life insurance policies, the EDLI scheme does not require a separate enrolment, physical examination, or premium payments. The scheme automatically becomes applicable to any individual once he or she becomes eligible under the EPF scheme.

The entire contribution towards EDLI is borne by the employer. As per the scheme, the employer will contribute:

• The employer contributes 0.5% of the monthly wages of the employee towards the EDLI scheme.
• The contribution is calculated only up to the statutory ceiling of wages.
• Based on the current wage ceiling of ₹15,000 per month, the maximum contribution towards EDLI would be ₹75 per month per employee.

The contribution rate shall be notified by the central government from time to time considering the actuarial valuation of the Insurance Fund.

EDLI Scheme at a Glance

Features of Employees' Deposit Linked Insurance

Here are some of the important features of the Employees' Deposit Linked Insurance scheme:

• Life insurance coverage for all eligible EPF members.
• No premium or contribution paid by the employee.
• The employer pays the complete premium of the insurance.
• The insurance is valid only when the death takes place during the service of the employee.
• Maximum assurance benefit is ₹7 lakh.
• Minimum amount of assurance is ₹2.5 lakh for eligible members.
• The insurance is available for all eligible members of the exempted provident fund.
• The claim can be made either online or offline as per the procedure.
• The insurance amount is directly credited to the nominee or the eligible beneficiary.

Eligibility Criteria for EDLI

An employee is generally eligible for the EDLI Scheme if he or she is an active participant in the Employees' Provident Fund or an eligible exempted provident fund. However, the following conditions are to be met to ensure that the assured benefit becomes payable:

• The individual must be an active EPF member.
• The employee should have died during employment.
• The individual's employer must be a beneficiary under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, or the applicable statutory provisions.
• The EPF deductions must be made as per the EPF Act.

EDLI Assurance Benefits

One of the important changes made in the Employees' Deposit Linked Insurance Scheme, 2026, is regarding the calculation of the assurance benefit. In fact, there are two methods by which the insurance amount can be calculated under the EDLI scheme.

Method 1: Benefits Based on Average Provident Fund Balance

If an employee passes away while being an EPF member, then the nominee or legal heirs are eligible to receive assurance benefits. The amount will be based on the average balance maintained in the employee’s provident fund account.

The amount paid is equal to the average balance maintained by the member during the preceding 12 months or during the whole membership if the tenure of the EPF membership is less than 12 months.

When the average balance exceeds ₹50,000, then the amount payable is determined as follows:

₹50,000 + 40% of the excess of ₹50,000

But the amount payable under this scheme will not exceed ₹1 lakh.

To calculate the average balance of provident fund, the below-mentioned amount will be considered:

• Employee contribution
• Employer contribution
• Due contribution, though it may not be deposited yet
• Interest earned on the provident fund balance

The 12 months are calculated starting from the month preceding the month of death of the employee.

It is important to note that even if the average provident fund account balance is below ₹50,000, the nominee is guaranteed to be given a minimum assurance benefit of ₹50,000 according to this formula.

Method 2: Enhanced Assurance Benefit for Continuous Membership

For employees who have completed 12 months of continuous employment and EPF membership, the EDLI scheme provides higher assurance benefits. Under this method, the insurance amount will be calculated using this formula:

35x average monthly wages (within wage ceiling) + 50% of average PF balance of last 12 months (capped at ₹1.75 lakh)

Following the above formula:

• Minimum assurance benefit to be paid is ₹2.5 lakh.
• Maximum assurance benefit to be paid is ₹7 lakh.

However, in case the amount calculated above is less than the amount payable under the average balance method, then the nominee gets the higher amount.

Also Read: Employees' Pension Scheme (EPS) 2026 Explained: Eligibility, Benefits, and Key Changes

How to Apply for EDLI Claim: A Step-by-Step Process

The legal heir or registered nominee can follow the steps below to claim the insurance amount under EDLI:

Step 1: The legal heir/nominee must fill out the relevant EDLI claim form (Form 5 IF for EDLI).

Step 2: Attach required documents:

• Death Certificate
• Proof of Nominee/Claimant Identity
• Bank Details (cancelled cheque/passbook)
• Details of EPF Account Holder (UAN/Account No.)

Step 3: The employer verifies and endorses employment and EPF details.

Step 4: Submit the claim form and documents to the EPFO office.

Step 5: Once the verification process is completed, the claim amount is deposited directly into the nominee or legal heir’s bank account.

Who Receives EDLI Insurance Benefits?

The insurance amount under EDLI is paid based on the nomination made by the employee under the EPF framework.

• Nominee: The registered nominee will be given priority for insurance benefits.
• Family: If there is no valid nomination, the amount will be paid to eligible family members.
• Legal Heirs: In case no nomination or no family members are available according to the terms of the scheme, the insurance amount is payable to the legally entitled person.

A Few Exceptions to Note: In case a nominee or member of family is accused of killing or assisting in killing the employee:

• Their claim will be on hold until the completion of the criminal process.
• In case of a conviction, the nominee will not be eligible for the plan at all.
• In case of an acquittal, the nominee gets back their share.

Timeline for EDLI Claim Settlement

One of the key improvements under the EDLI scheme, 2026, is the timeline of claim settlement.

Standard Timeline: As per EPFO, claims which are complete in all aspects must be settled within 20 days of the date of receipt.

Incomplete Documents: EPFO must inform about the inefficiencies within 20 days of receiving the application.

Settlement Delay: In case there is a delay in settling a claim due to invalid reasons, then:

• The responsible authorities can be held accountable.
• Interest may be charged at 12% per year on the amount due.
• This interest will be recovered from the salary of the concerned officers.

Special Provisions Under EDLI Scheme 2026

EDLI Scheme 2026 has improved various employee-friendly rules to improve coverage and continuity of benefits:

• Continuity of service (60-day gap clause): While deciding continuity of service, a gap not exceeding 60 days between two employments is ignored. If the employee’s EPF membership continues, the service rendered under more than one employment may be treated as continuous service.
• Multiple Jobs: For an employee having two or more jobs, EPF amounts from all the accounts are considered together. Likewise, the employee’s wages are also added together within the wage ceiling limit.
• Death within 6 months of contribution: In case of the death of an employee within 6 months of the latest EPF contribution but who is still employed with the same employer, he or she is eligible for EDLI assurance benefit.

FAQs

What is the EDLI Scheme, 2026?

The EDLI Scheme, 2026 is a life insurance benefit linked to EPF that provides financial protection to the family or dependants of a deceased employee. It ensures a lump-sum payout in case of the employee’s death during service.

What is the maximum insurance benefit under EDLI?

The maximum insurance benefit under the EDLI scheme is up to ₹7 lakh. This is the upper limit of the assured payout provided to the nominee or legal heirs.

Is there any cost for employees under EDLI?

No, employees do not have to contribute anything towards EDLI. The entire insurance premium is fully paid by the employer, making it a zero-cost benefit for workers.

How is the EDLI benefit calculated?

The benefit of the EDLI scheme is calculated using a wage-based formula (35× average monthly wages + PF component) or based on average PF balance. The final amount is subject to minimum and maximum limits under the scheme.

What is the minimum assured amount?

The EDLI scheme guarantees a minimum payout of ₹2.5 lakh, ensuring basic financial support to the family even in lower salary or low balance cases.

Who receives the EDLI payment?

The EDLI payment is made primarily to the registered nominee in the EPF account. If no valid nomination exists, it is paid to eligible family members or legal heirs as per rules.

How quickly are EDLI claims settled?

EDLI claims are required to be processed and paid within 20 days of submission. The amount is directly transferred electronically to ensure faster financial assistance.

What happens if there is a delay in payment?

If there is an unjustified delay in claim settlement, penalties are imposed on the responsible authorities. This rule is meant to ensure timely processing and avoid hardship to families.