Employees' Deposit Linked Insurance, or EDLI, is a life insurance benefit that comes bundled automatically with your EPF account — most salaried employees have it without realising, since it doesn't require a separate application or premium payment from the employee's side.
If an employee covered under EPF passes away while still in service, EDLI pays their nominee a lump sum, calculated based on the employee's average monthly salary over recent months, subject to a maximum benefit cap set by the scheme. This is entirely separate from the employee's own EPF balance, which is also paid out to the nominee — EDLI is an additional benefit on top of that.
The premium for EDLI is paid by the employer, not deducted from the employee's salary, which is exactly why it's so commonly overlooked — there's no line item on a payslip drawing attention to it the way EPF or NPS contributions are.
If you're evaluating your family's overall life insurance coverage, it's worth checking whether your EPF-linked EDLI benefit is factored in, since it provides a baseline of coverage that reduces (even if only modestly) how much additional term insurance your family might need for adequate protection.
Frequently asked questions
What is EPF?
The Employees' Provident Fund is a mandatory retirement savings scheme in India for salaried employees at eligible establishments, where both the employee and employer contribute a percentage of the employee's basic salary and dearness allowance every month, with the accumulated balance earning interest until withdrawal.
Is EPF contribution mandatory?
Yes, for employees earning up to the statutory wage ceiling working at establishments with 20 or more employees, EPF contribution is mandatory. Employees earning above the ceiling, or at smaller establishments, may have EPF as optional or may not be covered, depending on specific rules.
What percentage of my salary goes to EPF?
The employee contributes 12% of Basic+DA every month, and the employer matches this with another 12% — though the employer's share splits between EPF and the Employees' Pension Scheme (EPS), rather than all of it going to your EPF account.