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| Insurance >> Group Schemes >> Group Insurance Scheme in Lieu of EDLI |
We wish to introduce to you our Group Insurance Scheme which is given in lieu of Employees Deposit Linked Insurance (EDLI). As you are aware, all employers, to whom the Employees Provident Fund Act, 1952 applies, have a statutory liability to subscribe to Employees Deposit Linked Insurance Scheme, 1976 to provide for the benefit of Life Insurance to all their employees. The employer has to pay 0.51% of the monthly wage bill to Regional Provident Fund Commissioner (RPFC) for this purpose.
However a company may be exempted from this scheme if it takes LIC's GROUP INSURANCE SCHEME vide CPFC circular No. 2/1849/88/EDLI dated 11th July 1990, as LIC Scheme provides better benefits to employees. For the company also it works out more economical. The employees get higher insurance cover as shown under, |
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| Under EDLI |
Under LIC Group Insurance |
| 1) |
The insurance amount is equivalent to the balance in employees PF A/c. |
1) |
The insurance amount is equal to notional PF |
| 2) |
No insurance is payable if average of last 10 months balance is less than Rs. 500/- |
2) |
There is no requirement of minimum balance |
| 3) |
The minimum Sum Assured is Rs. 500/- |
3) |
The minimum Sum Assured is Rs. 5000/- |
| 4) |
If the balance exceeds Rs. 35,000/-, insurance amount is restricted to
Rs. 35000/- plus 25% of the excess over Rs. 35,000/-. |
4) |
Full Sum Assured is paid. There is no restriction. |
| 5) |
The maximum Sum Assured is
Rs. 60,000/- |
5) |
The maximum Sum Assured is Rs. 62,000/- |
| 6) |
There is no Double Accident Benefit |
6) |
Double Accident Benefit can be taken where on death due to accident the insurance money payable is doubled. |
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From the above it can be seen that Group Insurance of LIC is more beneficial to employees and this is precisely the reason why the PF authorities are kind enough to allow Exemption from EDLI if the company takes the GI policy of LIC.
As the Scheme is MORE BENEFICIAL to workers at LESSER COST to the company, we are sure that you would give a favourable consideration for adopting the scheme at the earliest. |
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| Group Insurance in LIEU of Employees Deposit Linked Insurance Scheme |
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| Eligibility |
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All members of Provident Fund Accounts aged 18 and above as long as they remain members of P.F.
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| Minium Membership |
: |
All employees covered by the Employees Provident Fund and Miscellaneous Provisions Act, 1952 in an establishment having 20 or more members.
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| Insurance Cover |
: |
Uniform cover ranging from Rs. 60,000 to Rs.62,000 per member. Graded cover of Rs. 5,000 to Rs.62,000 per member depending upon the service and monthly salary. Maximum upto 2 lacs may be given as per requirement. |
| Premium |
: |
Employer has to pay premium and claim tax benefits. |
| Claim Payable |
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On Death |
| Double Accident Benefit |
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On payment of additional premium of Rs. 0.75 paise per 1000 Sum Assured per annum
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| Plan of Assurance |
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One Year Term Assurance Plan |
| Data Required |
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Name, Date of Birth or Age, Date of Joining Service, P.F.Code, Monthly Salary.
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| Special Features |
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- Low cost as the LIC premium would be less than the prescribed charges payable by the employer to the P.F. Authorities
- Cover to all members regardless of the amount standing to their individual PF Accounts
- Easy administration and prompt settlement of claims
- In Government EDLI Scheme for coverage all balance of PF of last one year is seen to grant insurance benefits to the nominee of the deceased employee. If average balance exceeds Rs. 35,000/- the benefit will be equal to Rs. 35000 plus 25% of the amount in excess of Rs. 35,000/- subject to maximum of Rs. 60,000. In case of Group Insurance Scheme in lieu of EDLI of LIC irrespective of balance in P.F. Account of employee insurance benefit based on notional balance calculated on salary and past service is payable
- In EDLI, Employer is required to pay 0.51 paise per Rs. 100 wages per month to PF authorities under Account No. 21. Thus charges under EDLI depends upon ages of members. LIC premium is normally lower
- Exemption from operation of EDLI is required to be obtained from P.F. Authorities while finalising the scheme. ( Printed forms are available for this purpose)
- Exemption from operation of EDLI is required to be renewed after every three years
- Inspection charges of 0.005 paise is payable every month by employer to P.F. Authorities for Rs. 100 wages irrespective of the fact whether Governments EDLI Scheme or LIC'S Scheme Is in operation
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