On 29 June 2026, the Ministry of Labour and Employment notified the Employees’ Deposit-Linked Insurance Scheme, 2026 (EDLI Scheme) under the Social Security Code, 2020 (Social Security Code). This Scheme modernises the existing deposit- linked insurance scheme by improving the benefit structure, streamlining claim settlement, strengthening employer compliance, and introducing provisions to improve financial security for the families of deceased employees.
Key Highlights:
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The Scheme has been notified under Section 15(1)(c) of the Social Security Code and applies to all establishments covered under Chapter III of the Social Security Code.
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It is a replacement for the Employees’ Deposit Linked Insurance Scheme, 1976, without disturbing the existing rights and liabilities of events which arose before its supersession and applies to employees covered under the Employees’ Provident Fund Scheme, 2026, as well as members of exempted provident funds under the Social Security Code, 2020.
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The Scheme provides deposit-linked life insurance benefits to the nominees or legal heirs of an employee who dies while being a member of the Employees’ Provident Fund (EPF).
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The Employer’s contributions to the Deposit-Linked Insurance Fund will be calculated on wages as defined under the Social Security Code, subject to the notified wage ceiling, and the contribution rate will be notified separately by the Central Government based on actuarial valuation.
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Employees are not required to make any contributions under the Scheme, and Employers are required to:
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Deposit EDLI contributions and administrative charges electronically within 15 days of the close of every month.
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Upload monthly employee details, including new members and employees exiting service, through the designated portal.
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Maintain prescribed records and registers and produce them for inspection whenever required.
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Ensure that the employer’s contribution is not recovered from employees’ wages.
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Default in payment of contributions will attract damages and penalties in accordance with the Employees’ Provident Funds Scheme, 2026.
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The Scheme introduces a revised assurance benefit structure:
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For all eligible members, the assurance benefit depends upon the average balance in the Provident Fund account maintained over the past 12 months (or membership period, whichever is less). The amount payable is equal to the average balance, subject to a maximum of Rs 50,000, with an additional 40% of the balance exceeding Rs 50,000, capped at Rs 1 lakh.
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A minimum assured benefit of Rs 50,000 is payable even in the case where average balance in PF account is lower than Rs 50,000.
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For employees who have completed 12 months of continuous employment, the nominee/legal heir will receive the higher of:
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35 times the average monthly wages (not exceeding notified wage ceiling) plus 50% of average balance in PF account, which is capped at Rs 1.75 lakh, or
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The benefit calculated based on the average PF balance.
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The overall assurance benefit shall not be less than Rs 2.5 lakh and shall not exceed Rs 7 lakh.
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“The Scheme also provides for an additional enhancement of 20% in the assurance benefit, in accordance with paragraph 21(5).
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Employees who die while in service within six months of the last PF contribution, provided they remain on the employer’s rolls, will also be eligible for assurance benefits.
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For determining continuous service, a gap of up to 60 days between two spells of employment will be ignored.
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Nomination made under the EPF Scheme will automatically apply for EDLI benefits. In the absence of a valid nomination, the benefit will be payable to eligible family members or legal heirs in accordance with the Scheme.
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Claims may be submitted either online or offline, and complete claims must be settled within 20 days of receipt. Delay without sufficient cause may attract penal interest at 12% per annum, recoverable from the salary of the concerned Commissioner.
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The Scheme mandates electronic payment of contributions, online filing of returns, maintenance of electronic records, and digital processing of claims, thereby strengthening transparency and administrative efficiency.
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The Scheme provides detailed provisions regarding:
– Administration and operation of the Insurance Fund;
– Investment and audit of the Fund;
– Budget preparation and actuarial valuation every three years;
– Maintenance of accounts and annual reporting.
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To obtain exemption, an establishment needs to have a Group Insurance Policy approved by the IRDAI which offers better terms than the Scheme itself, receive approval from majority employees, submit monthly online returns, and abide by all prescribed conditions. Exemptions will generally remain valid for three years, subject to renewal and continued compliance.
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Existing exemptions granted under the Employees’ Deposit Linked Insurance Scheme, 1976 will continue until their validity expires, after which renewal must be sought under the provisions of the EDLI Scheme.
Impact on Employers and Employees
The EDLI Scheme modernises the deposit-linked insurance framework by introducing enhanced assurance benefits, digitized compliance requirements, faster claim settlement timelines, and a structured exemption mechanism. Employers will need to align their payroll, EPF compliance, and reporting systems with the new Scheme. Employees and their nominees stand to benefit from enhanced financial protection and a more efficient claims process.
[Employees’ Deposit-Linked Insurance Scheme, 2026, published on 29-6-2026]
