Rs 7 lakh life insurance cover at zero premium, which very few EPF members are aware of; check how to claim when needed

Did you know that your monthly payment to the EPF (Employees Provident Fund) could also give you the added benefit of a life insurance cover of up to Rs 7 lakh without needing to pay a separate premium?

Keep reading to know about eligibility, the claim process and other key details.

What is the Employees' Deposit Linked Insurance Scheme (EDLI)?

The EDLI Scheme is a government-backed life insurance cover available to employees covered under the Employees' Provident Fund (EPF).

“In the event of the EPF member's death while he or she was in service, the nominee or legal heir receives a lump-sum insurance payout without the need of a separate premium from the employee,” says Santosh Sahoo, Vice President, SME Insurance, Probus.

The biggest advantage of EDLI is that employees do not have to purchase a separate insurance policy, undergo medical tests or complete additional enrolment formalities. The cover automatically exists as long as the employee remains an active EPF member.

Who is eligible to claim EDLI benefits?

To receive the benefit, the employee must have been in employment and covered under EPF at the time of their death.

“It is also important for employees to keep their nomination details updated with EPFO to ensure a smooth claim process for their nominees. In the absence of a valid nominee, legal heirs may be required to provide additional documentation to establish their claim,” says Yogesh Agarwal, Founder & CEO, Onsurity.

Also read: Why Rs 1 crore term insurance cover in 2026 may not be enough for many families

Apart from active EPF membership, the employer should also have been contributing to EPF against a valid Universal Account Number (UAN).

How do EPF, EPS, and EDLI contributions work?

EPF, EPS (Employees’ Pension Scheme) and EDLI are three separate schemes that together form the social security framework for employees. Here's how contributions are allocated under each of these schemes:

Scheme Name	Employee Contribution	Employer Contribution	Purpose of the Fund
EPF (Provident Fund)	12% of basic salary	3.67% of basic salary	Lump-sum retirement savings
EPS (Pension Scheme)	0% (Nil)	8.33% (capped at ₹1,250)	Monthly lifelong retirement pension
EDLI (Insurance)	0% (Nil)	0.5% (capped at ₹75)	Built-in life insurance cover

Source: Probus

While EPF focuses on retirement savings and EPS provides pension benefits, EDLI acts as a financial safety net for the employee's family in case of death during service.

How is the EDLI benefit calculated, and what is the maximum a nominee can receive?

The EDLI benefit is linked to the employee's salary and is calculated based on the average monthly salary drawn during the prescribed period before death, as per EPFO guidelines.

The formula has two components:
The first is 35 times the average monthly wage of the last 12 months, capped at a wage of ₹15,000, which works out to a maximum of ₹5.25 lakh. The second is a bonus equal to 50% of the average PF balance over the last 12 months, capped at ₹1.75 lakh. Added together, the maximum payout is ₹7 lakh,” explains Rishi Agrawal, CEO & Co-founder, Teamlease Regtech.

This means if your basic salary is above Rs 15,000 for over a year and the average EPF balance is over 3.5 lakh for over a year, your legal heirs can get the maximum amount of 7 lakh.

The scheme also provides a minimum level of protection. The minimum EDLI benefit is ₹2.5 lakh. Following an amendment on 18 July 2025, if a member's average PF balance is below ₹50,000, the minimum benefit payable is ₹50,000, a small but meaningful safeguard for lower-balance members, he adds.

How can nominees claim EDLI benefits?

In case of an unfortunate death of an EPF subscriber, the nominee or the legal heir must submit Form 5 IF, death certificate, KYC documents, bank account details and any succession documents to EPFO through the employer or directly to them.

The claim process gets relatively faster with updated nominee details and accurate documents.

Agrawal also highlights two simple steps that can make a significant difference for families during difficult times.

“Two practical recommendations for every employee are to file or refresh their EPFO nomination today and make sure at least one person in the family knows the employee's UAN. Those two minutes of effort during the lifetime can save the family weeks of paperwork at the worst possible moment,” he says.