That 0.5% EDLI Contribution?
It’s Your Most Underutilized Strategic Asset.
The law requires you to have a life insurance scheme. It doesn't require you to settle for the default. Here's the playbook for transforming a mandatory expense into your most valued employee benefit.
Get Your Free EDLI Comparison ReportDeconstructing EDLI: What Every CHRO Needs to Know
This executive briefing provides clear, unbiased information on the mandatory scheme.
What is it?
A mandatory insurance scheme provided by the EPFO for all private sector salaried employees, linked to their PF account.
How is it Funded?
It is funded solely by the employer's contribution of 0.5% of the employee's basic salary (note: the salary is capped at ₹15,000 per month for this calculation).
What is the Payout?
The benefit is 35x the average monthly salary (capped at ₹15k) plus a bonus up to ₹1.75 Lakhs. The absolute maximum payout is capped at ₹7 Lakhs.
The Maximum Payout Calculation:
(35 x ₹15,000) + ₹1,75,000 = ₹7,00,000
The Hidden Gaps in a Compliance-Only Approach
From an HR strategy perspective, relying solely on EDLI presents four critical gaps.
The Reputation Gap
A ₹7 Lakhs cap is insufficient for most families, creating a risk to your company's reputation as a caring employer during a crisis.
The 'Moment of Truth' Gap
The EPFO claims process can be slow and bureaucratic, failing the family at their most vulnerable moment. It lacks our Red Carpet Promise.
The Flexibility Gap
EDLI is one-size-fits-all. It can't be customized by employee grade or enhanced with riders for critical illness or disability.
The Opportunity Gap
It's a mandatory cost with no strategic value. It offers no data, no engagement, and no boost to your employer brand.
The Strategic Choice: GTL in Lieu of EDLI
The law allows companies to opt-out of EDLI by providing a superior, privately managed Group Term Life (GTL) insurance scheme. This is how you transform a mandatory cost into a strategic asset.
| Feature | Standard EDLI Scheme | GTL Powered by Ethika |
|---|---|---|
| Coverage Amount | Capped at ₹7 Lakhs | Customizable (e.g., 5x CTC) |
| Claims Process | Slow, bureaucratic EPFO process | Empathetic, fast support via our Red Carpet Promise |
| Administration | No visibility or control | Real-time analytics via The Ethika OS™ |
| Employee Value | Invisible, forgotten benefit | A cornerstone of your Happiness Ecosystem |
Unlock the Hidden Value in Your PF Contributions
Use this calculator to see how your mandatory EDLI contribution can be reallocated to fund a far superior Group Term Life policy.
Step 1: Your Current Reality
Enter your company's details to calculate your current mandatory annual spending on EDLI.
Step 2: The Two Paths Forward
Path A: The Compliance Choice
Replace EDLI with a superior GTLI policy providing ₹7.01 Lakhs cover per employee.
Path B: The Strategic Choice
Upgrade to a high-value policy funded by your existing EDLI budget.
This is how you move the conversation from cost-cutting to value-creation in your next leadership meeting.
Our White-Glove Exemption Service
We manage the entire compliance and implementation process, making your switch to a strategic benefits program completely seamless.
Strategic Design
We analyze your employee census and design a superior GTL policy that meets all regulatory requirements for EDLI exemption.
PF Exemption Management
Our compliance experts prepare and manage the entire application process with the regional PF commissioner. We handle the paperwork.
Launch & Engagement
We provide communication templates and support to launch the new, high-value benefit to your team via the Ethika OS™.
The Exemption Process in Detail
While the process involves multiple steps, our role is to make it effortless for you. Here’s a transparent look at the journey we manage on your behalf.
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1
Board Resolution & Application
Your company passes a board resolution to seek exemption from EDLI. We then prepare and submit the formal application (Form 1) to the regional PF commissioner on your behalf.
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2
Policy Finalization & Comparison
We work with you to finalize a Group Term Life policy from a registered insurer. A key document we prepare is a detailed comparison chart, proving that the benefits of your new GTL policy are superior to the EDLI scheme.
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3
Document Submission to EPFO
We compile and submit a complete dossier to the EPFO, including the application, board resolution, policy comparison, and a list of all covered employees.
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4
EPFO Review & Approval
The PF commissioner reviews the application to ensure the GTL scheme is more beneficial for employees. We manage any queries and follow up diligently until the official exemption is granted.
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5
Implementation & Communication
Your part is done. Once the exemption is approved, you stop the 0.5% contribution, and we help you announce a benefit that your employees will truly appreciate.