Group EDLI plans typically offer higher coverage compared to the standard protection provided by the Employee Provident Fund Organisation (EPFO). The EDLI scheme policy coverage is intricately linked to the employee provident fund, serving as a life insurance safeguard for employees.
One of the key EDLI scheme benefits is the potential for substantial cost reduction. Employers often find that the savings on insurance premiums can amount to approximately 50% of their previous contributions to the department. These savings can be strategically utilized to enhance the company's financial position or to further improve employee benefits, such as implementing more comprehensive term coverage plans.
It's worth noting that the premiums paid by employers under the EDLI insurance scheme are considered business expenses and are eligible for tax deductions, providing additional financial advantages.
Employees Concurrence
The first step to implement the change is to take signed consent from majority of the employees. The change needs to be notified prominently and employee acceptance obtained within a month of publishing the notice.
Requires RPF Approval
Employers need to obtain a No Objection Certificate (NOC) from the Regional Provident Fund to enable implementation of the EDLI cover. Insurers can assist in the process to make the transition smooth and easy to implement.
EDLI is not a Term Plan
EDLI policy can only be purchased from insurers who have an approved product to offer. Any general term plan purchased from any insurer may not be compliant to replace the Employee Deposit Linked Insurance of PF.
