EPFO Rule Change: EDLI Life Cover Eligibility Criteria Eased—Check Key Details Here

The Central government has relaxed life insurance coverage norms for Employees' Provident Fund (EPF) subscribers, ensuring a minimum financial assistance of Rs 50,000 under the Employees' Deposit Linked Insurance (EDLI) scheme for all members.

The Ministry of Labour and Employment on July 18 notified the new guidelines for the EDLI scheme covering all Employees' Provident Fund Organisation (EPFO) members.

According to the notification, in the event of an employee's death, the family will receive a minimum assurance benefit of Rs 50,000—even if the employee's average provident fund balance is lower than this amount.

All EPF subscribers are automatically covered under the Employees' Deposit Linked Insurance (EDLI) scheme, which provides life insurance coverage of up to Rs 7 lakh in case of the death of an EPFO member during their service period.

The revised norms lay out the minimum insurance amount under paragraph 22 titled 'Scales of assurance benefit and the minimum average balance to be maintained by an employee.'

According to the new clause in the amended rules, a minimum assurance benefit of Rs 50,000 will be paid in case an employee (covered by EPFO or exempted provident fund) passes away during the last 12 months or during their membership period.

Earlier, the death benefit used to be determined by the average provident fund balance of the subscriber. Beneficiary families will now receive a minimum guaranteed payout of Rs 50,000 under the new EDLI norms.

60-Day Service Gap Flexibility

The revised rules also remove the gap of up to 60 days between two periods of employment when calculating the continuous 12-month period required to qualify for the minimum assurance benefit under the scheme. Now, multiple stints can be added to consider the 12-month minimum continuous service period.

“The gap of up to 60 days between two spells of employment shall be ignored and such multiple services shall be added, being treated as continuous service,” the notification mentioned.

Post-Contribution Coverage In Case Of Death Within Six Months

The regulation now explicitly states that employees who die within six months of their last contribution—while still employed—will remain eligible for the EDLI benefit. To receive this benefit, they should remain on the payroll of the employer.

“In the event an employee who is a member of the Fund or a provident fund exempted under section 17 of the Act… dies in service within six months of the last contribution received while still being on the rolls of the employer, such an employee shall get the assurance benefit as per the scheme,” the new notification mentioned.

These changes are aimed at addressing long-standing issues faced by low-income workers, who change jobs frequently.  

For all employees insured under EPFO, EDLI offers life insurance with a minimum of Rs 2.5 lakh and a maximum of Rs 7 lakh in the event of the death of the EPF subscriber during the service period. Only the employer makes a contribution to the EDLI scheme, unlike the EPF contribution, which is made by both the employer and the employee.