All employees to whom the Employee's Provident Fund and Miscellaneous Provision Act applies, have a statutory liability to subscribe to Employee's Deposit Linked Insurance Scheme, to provide for the benefit of Life insurance to all their employees. Under the scheme the insurance benefit is equal to the average balance to the credit of the deceased employee in the Provident Fund during the last 12 months, provided that where such balance exceeds INR 35000, insurance cover would be equal to INR 35000 plus 25% of the amount in excess of INR 35000 subject to a maximum of INR 60000.

Thus if the length of service is not adequate and/ or the salary is low the average balance may be substantially less and such the benefit to the employee's family is either inadequate or non-existent.

The contribution @ 0.50% of each employee's salary is payable by the Employer to the Provident Fund Authorities. However the employer may be exempted from consulting to this scheme, if he/she has provided for better insurance benefits through alternative scheme.

Group Insurance Scheme in lieu of EDLI has been accepted as one such better alternative. Few advantages of choosing the EDLI scheme for the employer & employee are:

1. The premium payable by the employer is usually less than the total contribution being paid by the employer to R.P.F.C; particularly when the salary level is high and average age of the group is low.
   
2. Settlement of claim is quicker; As Insurance companies majorly requires only the death certificate and the Claim Form from the employer.
   
3. Premium paid by the employer is treated as normal business expenses for Income-Tax purpose.
   
4. Each employee is covered for a sum assured ranging between 5000 to 62000 depending upon the current salary and service put in from day one irrespective of the actual balance in the Provident Fund
   
5. Alternatively every employee/ worker can be covered for a uniform sum assured of INR 62000 Double accident benefit can be allowed to the extent of the Sum Assured for an extra Premium @ Rs.0.75 per thousand Sum Assured per annum.
   
6. Double accident cover under all group Schemes taken together should not exceed Rs.4.5 lacks.
   

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