EDLI Scheme: Govt Eases Eligibility Criteria, Guarantees Members A Minimum Rs 50,000 Life Cover

The government eased the criteria for life cover under the Employee Deposit Linked Insurance (EDLI) scheme, which offers insurance coverage of up to Rs 7 lakh to employees in the case of death during service. EDLI comes under the Employees' Provident Fund Organisation (EPFO), and therefore, EPF members automatically become members of the EDLI scheme. According to the gazette notification dated July 18, 2025, the Ministry of Labour and Employment changed provisions about the life coverage for employees and eased the rules. The changes had become effective from the date of notification, and following the changes, the scheme may be called Employees' Deposit-Linked Insurance (Amendment) Scheme 2025. 

The changes have been made in paragraph 22 of the EDLI, 1976, which is about "Scales of assurance benefit and the minimum average balance to be maintained by an employee."

Minimum Rs 50,000 Assured Benefit:

One paragraph has been added to paragraph 22. The added provision in the amendment notification says that in the event of the death of an employee (covered under EPFO or exempted provident funds) during the previous twelve months or during the period of an employee's membership, a minimum assurance benefit of Rs 50,000 will be payable. This amount is assured coverage even if the average provident fund balance of an employee is less than Rs 50,000.

Earlier, only the average balance was paid to the nominee if it was less than Rs 50,000.

Gap Of 60 Days Between Two Employments Will Be Ignored:

The inserted proviso reads, "For the purpose of determination of the continuous period of twelve months required for eligibility of minimum assurance benefits payable under sub-paragraph (3) of the Scheme, the gap of up to sixty days between two spells of employment shall be ignored and such multiple services shall be added being treated as continuous service."

Sub-para (3) is about determining the quantum of benefits based on the employment for "a continuous period of twelve months, preceding the month in which an employee died". However, with the insertion of the new proviso, the break in service up to 60 days will be ignored to calculate 12 months of continuous service.

Benefit Extended To Employees Who Die Within Six Months Of Their Last Contribution:

The amendment brings another change by extending assurance benefits to employees who die within six months of their last contribution, as long as they were on the roll of the employer. In case of death of such employees, they will also be considered for assurance benefits.  

EDLI: 

EDLI provides death cover to all employees covered under EPFO for a minimum of Rs 2.5 lakh and a maximum of up to Rs 7 lakh in case of death during service. However, unlike EPF contribution, where both the employee and employer contribute to the scheme, EDLI contribution is made only by the employer. That is 0.50 per cent of the salary (basic and dearness allowance). 

The Central Board of Trustees (CBT) of the EPFO approved the change in rules in March 2025. Now, with the gazette notification, these have become effective from July 18, 2025.