EDLI Scheme: Ensuring Insurance for Private Sector Employees

Why in the news?

The EDLI scheme has gained attention as the government recently increased the maximum assured benefit to Rs 7 lakh, enhancing social security for private sector employees, especially during uncertain times of employment and economic fluctuations.EDLI Scheme: Ensuring Insurance for Private Sector Employees

Overview of EDLI Scheme:

  • The Employees Deposit Linked Insurance (EDLI) Scheme was launched in 1976 by the government.
  • It offers term life insurance to employees in the private sector.
  • Managed by the Employees Provident Fund Organisation (EPFO), it covers all organisations registered under the Employees Provident Fund (EPF) and Miscellaneous Provisions Act, 1952.

Benefits and Features:

  • Maximum benefit: Rs 7 lakh to the nominee if an EPF member dies while in service.
  • Minimum benefit: Rs 2.5 lakh if the employee was employed for at least 12 months.
  • Insurance cover is free for employees; employers contribute 0.5% of monthly wages (up to Rs 15,000).
  • Automatically enrols EPF members, and the payout goes directly to the nominee’s bank account.

Key points :EPFO

  • EPFO is a statutory body under the Ministry of Labour and Employment.
  • It administers the Provident Fund, Pension, and Insurance schemes for employees in the organised sector.
  • Governed by the Central Board of Trustees, which includes representatives from the government, employers, and employees.

Employees’ Provident Fund (EPF) Scheme:

  • EPF is the main scheme under the 1952 Act.
  • Both employee and employer contribute 12% of the employee’s basic salary and dearness allowance.
  • Mandatory for employees with a monthly salary of up to Rs. 15,000.

Sources Referred:

PIB, The Hindu, Indian Express,Hindustan Times

Watch on Youtube : EDLI Scheme 1976: Life Insurance for Private Sector Employees Explained