Salaried employees have a reason to cheer! The Employees’ Provident Fund Organisation (EPFO) not only helps you build a secure retirement corpus through the EPF scheme, but it also provides a free life insurance cover under the Employees’ Deposit Linked Insurance (EDLI) Scheme. Many contributors are unaware that they’re automatically protected under this scheme without paying any additional premium.

The EDLI (Employees’ Deposit Linked Insurance) scheme ensures financial protection for an employee’s family in the unfortunate event of the employee’s death during service. Under this plan, the nominee or legal heir is entitled to receive a minimum of ₹2.5 lakh and a maximum of ₹7 lakh as insurance benefits.

The best part — employees do not have to pay anything for this coverage. The employer contributes 0.5% of the employee’s basic salary (subject to a salary cap of ₹15,000 per month) toward the scheme every month.

All employees who contribute to the EPF (Employees’ Provident Fund) automatically become members of the EDLI scheme. The benefit applies to both permanent and contractual workers covered under EPFO. However, it does not extend to employees of Assam’s tea plantations, as per the official notification.

This means if you are an EPF member and contribute regularly, your family is already protected under the EDLI scheme — without the need to buy a separate term insurance policy.

The primary advantage of EDLI is financial security for the employee’s dependents. In case of the member’s death while in service, the nominee or legal heir receives the insurance payout within 20 days of claim submission. This immediate financial relief helps the family manage expenses and deal with sudden monetary stress.

Additionally, the scheme requires no medical check-up, no separate registration, and no premium from employees — making it one of the simplest and most accessible life insurance benefits in India.

If an employer fails to deposit the required contribution on time, a penalty of 1% per month is levied for the delay. However, the EPFO board has the discretion to reduce or waive these damages in cases of genuine financial hardship or administrative challenges.

The insurance payout under the EDLI scheme is calculated using a specific formula based on the employee’s last 12 months’ salary and PF balance.

Calculation formula:

• 35 times the average monthly salary (capped at ₹15,000) +




• 50% of the average PF balance (up to a maximum of ₹1.75 lakh).

Based on this, the maximum possible benefit is ₹7 lakh. To ensure your family receives the highest possible amount, it’s important to maintain regular EPF contributions and keep your nominee details updated in your UAN profile.

While most people view EPF as a retirement savings tool, the EDLI component acts as an added life insurance safety net — completely free of cost. It guarantees that in the event of an untimely death, the employee’s family receives immediate financial help without any paperwork hassles or insurance premiums.

The EPFO’s EDLI Scheme is an invaluable but often overlooked benefit for salaried employees. Without spending a single rupee, you and your family get insurance protection worth up to ₹7 lakh. Employees are advised to regularly review their EPF accounts, ensure accurate nominee details, and maintain consistent contributions to enjoy complete financial security — both during and after their working years.