What is Edli Meaning and Features. Deposit insurance institutions play a crucial role in safeguarding the financial stability of depositors, especially in the wake of financial crises. These institutions emerged globally as a response to banking sector vulnerabilities, emphasizing the importance of deposit insurance. The banking sector’s pivotal role in financial and economic activities, coupled with its reliance on deposits as a primary source of funding, underscores the need for such insurance mechanisms.

One such notable scheme is the Employee Deposit Linked Insurance (EDLI) provided by the Employees Provident Fund Organization (EPFO) in India.

What is EDLI?

The term EDLI stands for Employee Deposit Linked Insurance. It is an insurance scheme launched by the EPFO in 1976, designed to provide financial protection to private sector salaried employees and their families. The primary objective of EDLI is to offer insurance coverage that ensures financial assistance to the family of an EPFO member in the unfortunate event of the member’s death. The insurance coverage is based on the salary withdrawn during the last 12 months of the member’s service before death.

Key Features of the EDLI Scheme

The EDLI Scheme is characterized by several significant features:

1. Maximum Guaranteed Benefit: The scheme guarantees a maximum benefit amount of Rs 7,000, which is payable to the nominee or legal heir of the EPF member in the event of the member’s death while in service.
2. Automatic Enrollment: Employees who are automatically enrolled in the EPF Scheme are also automatically covered under the EDLI Scheme.
3. Minimum Guaranteed Benefit: EPFO guarantees a minimum benefit of Rs 2.5 lakh if the deceased member was continuously employed for at least 12 months prior to their death.
4. Employer Contribution: The employer is required to contribute a minimum of 0.5% of the employee’s monthly wages, up to a wage cap of Rs 15,000, towards the EDLI Scheme.
5. Direct Benefit Transfer: The benefits under the EDLI Scheme are directly credited to the bank account of the nominee or legal heir.
6. Required Documents for EDLI Claim

To file a claim under the EDLI Scheme, the claimant needs to submit several essential documents:

• Death Certificate: Proof of the member’s death.
• Guardianship Certificate: Required if the claim is filed on behalf of a minor nominee or legal heir by someone other than the natural guardian.
• Succession Certificate: Needed if the claim is made by a legal heir.
• Cancelled Cheque: A copy of a cancelled cheque from the bank account where the payment is to be made.
• PF Details: If the member was employed under an exempt establishment, the employer must provide the PF details for the last 12 months and an attested copy of the Member’s Nomination Form.

How to Submit EPS/EPF Nomination Digitally

To submit an EPS/EPF nomination online, follow these steps:

1. Visit the” EPFO” official website.
2. Go to the ‘Services’ tab and select “For Employees.”
3. Click on ‘Member UAN/Online Services’ and log in using your Universal Account Number (UAN) and Password.
4. Select ‘E-nomination’ under the ‘Manage Tab’.
5.  Click ‘Save’ and confirm the family declaration. Then, add family details as needed.
6.  Specify the total amount of shares and click ‘Save EPF Nomination’.
7. Click ‘E-sign’ to generate an OTP.
8.  Enter the OTP sent to your mobile number linked with Aadhaar.

Conclusion

The Employee Deposit Linked Insurance (EDLI) Scheme, administered by the Employees Provident Fund Organization (EPFO), provides crucial financial protection to salaried employees and their families. Understanding the meaning and features of EDLI helps in appreciating the importance of deposit insurance schemes in ensuring financial security.

Through its comprehensive coverage and straightforward process, EDLI stands as a valuable safety net for employees in the private sector.