Group Health Insurance glossary
EDLI (Employees Deposit Linked Insurance) vs Group Term Life
EDLI (Employees Deposit Linked Insurance) is a free life-insurance benefit under the EPF Act that pays a deceased EPF member’s nominee a lump sum, currently capped at ₹7,00,000. Group Term Life (GTL) is employer-bought cover that extends this beyond the EDLI limit to a chosen sum assured.
Key takeaway
EDLI is capped at ₹7,00,000 — often just months of income. A Group Term Life top-up at 3× salary can lift the nominee’s payout to ₹43,00,000 on the same life.
How EDLI works in an EPF-covered workforce
EDLI is built into the Employees’ Provident Fund. Every employee enrolled in EPF is automatically covered — there is no medical test, no enrolment form and no waiting period for the death benefit. The employer pays a small contribution of 0.5% of the monthly wage (on a wage base capped at ₹15,000) into the EDLI fund; the employee contributes nothing.
If an employee dies while in service, the nominee receives a one-time, tax-free lump sum. The benefit is calculated as 35 times the average monthly wage — with the wage capped at ₹15,000 — plus a bonus of up to ₹1,75,000, all subject to an overall ceiling of ₹7,00,000 and a floor of ₹2,50,000.
That ceiling is the catch. For most working households, ₹7,00,000 replaces only a fraction of the income a family loses. This is where Group Term Life comes in: an employer-arranged policy that sits on top of EDLI, with a sum assured the employer chooses — often a multiple of annual salary — so the payout is meaningful rather than symbolic.
A worked example (EDLI + GTL)
An employee earning ₹1,00,000 a month (annual salary ₹12,00,000) dies in service. Statutory EDLI pays its maximum of ₹7,00,000. The employer has also set up Group Term Life at 3× annual salary, adding another ₹36,00,000.
EDLI statutory cover
Group Term Life top-up (3× salary)
Total payout to nominee
EDLI alone would replace roughly seven months of this employee’s salary. With the Group Term Life top-up, the family receives close to three-and-a-half years of income — the difference between a token benefit and genuine financial protection.
Why EDLI and GTL matter for employers
EDLI is a compliance baseline, not a benefit you designed. Because it is capped at ₹7,00,000 and tied to a ₹15,000 wage base, it rarely reflects what your team actually earns. Employers who rely on EDLI alone often discover the shortfall at the worst possible moment — when a grieving family finds the payout covers only a few months of living costs.
Group Term Life turns that baseline into a real promise. It is one of the lowest-cost benefits per rupee of cover, it signals that the organisation stands behind its people, and it strengthens your offer in a hiring market where sum insured and family security are increasingly compared line by line.
There is also a practical lever: under Section 17(2A) of the EPF Act, an employer whose group life policy matches or exceeds EDLI benefits can seek an EDLI exemption — folding statutory and voluntary cover into a single, larger policy that is simpler to administer and far more valuable to employees.
How Onsurity handles life cover for your team
Onsurity helps employers layer Group Term Life on top of the statutory EDLI floor, so a nominee receives a payout that reflects real income rather than a ₹7,00,000 cap. Sum assured is set to a multiple of salary or a flat cover you choose, and the whole plan is bought and managed digitally — no paperwork chase, no insurer back-and-forth.
Life cover usually travels alongside group health, and Onsurity’s health plans settle cashless at 10,000+ network hospitals, with day-1 cover options so the benefit is live from an employee’s joining date. HR runs additions, exits and cover levels from the TeamSure dashboard in one place, without spreadsheets.
The Good Doctors concierge supports employees and families through claims and health questions, so the benefit feels like genuine care rather than a policy number — and your team understands exactly what their cover is worth before they ever need it.
Frequently asked questions
Is EDLI automatic, and who pays for it?
EDLI is automatic for every employee enrolled in EPF — there is no separate opt-in. The employer contributes 0.5% of the employee’s monthly wage (capped at a ₹15,000 wage base) to the EDLI fund. Employees pay nothing, and the death benefit is paid tax-free to the nominee.
What is the maximum EDLI benefit?
The current maximum assured benefit is ₹7,00,000, with a minimum assurance of ₹2,50,000. It is calculated as 35 times the average monthly wage (the wage is capped at ₹15,000) plus a bonus of up to ₹1,75,000, subject to the overall ₹7,00,000 ceiling.
How is Group Term Life different from EDLI?
Group Term Life (GTL) is a voluntary policy the employer buys on top of EDLI. It is not capped at ₹7,00,000 — the employer sets the sum assured, often a multiple of annual salary. GTL can cover employees regardless of their EPF status and is far easier to scale to a meaningful payout.
Can an employer opt out of EDLI with a private policy?
Yes. Under Section 17(2A) of the EPF Act, an establishment can seek EDLI exemption if it provides a group life policy with benefits at least equal to EDLI. Many employers use a Group Term Life plan to claim this exemption while giving the family a much larger payout.
Are Group Term Life premiums tax-deductible for employers?
Yes. GTL premiums the company pays are generally treated as an allowable business expense, and the cover is not a taxable perquisite in the employee’s hands. This makes topping up EDLI with GTL a cost-efficient way to strengthen your benefits package.
Ready to top up EDLI with real life cover?
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