Life cover & benefits
The EPF ceiling moved. Your team’s life cover didn’t
From 17 September, the EPF wage ceiling rose from ₹15,000 to ₹25,000, and with it the employer’s contribution to EDLI, the life cover attached to every PF account. The most a family can receive from it stayed exactly where it was. That gap is worth a look.
The contribution went up. The cheque a family would receive did not.
The change was technical, and it was easy to miss. The wage ceiling on which EPF contributions are calculated moved from ₹15,000 to ₹25,000 a month. Employers pay the EDLI contribution on wages up to that ceiling, so for employees at or above it, the employer’s EDLI contribution rises by up to two-thirds.
What did not move is the benefit. Under the 2026 EDLI Scheme, a member with twelve months’ continuous employment before death is covered for between ₹2.5 lakh and ₹7 lakh. A member without that service history is covered for ₹50,000 to ₹1 lakh. Those bands are unchanged.
For most salaried employees, ₹7 lakh is a modest sum against a family’s needs. That is where an employer’s own group term life cover comes in, and why this is a good moment to look at the two together.
In short
- From 17 September 2026 the EPF wage ceiling rose to ₹25,000, so employers pay more into EDLI.
- The most a family can receive from EDLI is unchanged: ₹2.5 lakh to ₹7 lakh with twelve months’ service.
- Group term life, set as a multiple of salary, is how employers give cover that matches what people earn.
- An EDLI exemption exists where an employer’s own policy is better for every member, but it is an ongoing obligation, not a one-time form.
Put simply: EDLI, the Employees’ Deposit Linked Insurance scheme, is the life cover that comes with an EPF account. If a member dies in service, their nominee receives a benefit set by the scheme, paid for by the employer’s contribution. Group term life is a separate policy an employer buys, usually covering each employee for a multiple of their salary.
The bill moved; the benefit didn’t
It is unusual for a statutory cost to rise without the benefit moving with it, but that is what happened here. The contribution is calculated on wages up to the ceiling, so a higher ceiling means a higher contribution. The benefit is set by the scheme’s own floor and ceiling, which this change did not touch. Nothing is wrong with that; it simply means the employer is now spending more on a cover whose maximum stays the same.
Why EDLI alone is rarely enough
EDLI is a floor, not a plan. Its maximum is the same for a junior executive and a senior manager, and a member who has not completed twelve months of continuous employment receives far less. For a family that has lost an earning member, the gap between that and real need can be large. Group term life closes it, because the employer designs it: the sum insured can follow salary, and the policy covers the employee around the clock, worldwide.
The exemption route, and what it really asks
Employers whose own group life cover is better than EDLI for every member can apply for an exemption from EDLI. Under the 2026 Scheme that needs an IRDAI-approved policy that beats EDLI for each member, the consent of a majority of employees, monthly returns, and renewal every three years. It is a continuing obligation, not a one-off purchase, and approval is never automatic. Whether it makes sense depends on your workforce, and it deserves a proper look rather than an assumption.
Who pays what when an employee dies
It helps to see each cover side by side, because they do different jobs. This is category-level, general guidance, not any one insurer’s product.
| The cover | What it does |
|---|---|
| EDLI | A statutory benefit linked to PF, ₹2.5 lakh to ₹7 lakh with twelve months’ service |
| Group term life | Employer-designed cover, often a multiple of salary, 24 hours a day, worldwide |
| Group personal accident | Pays only for accidental death or disability, alongside life cover |
| The employee’s own term policy | Stays with them after they leave the job |
A five-minute check for an employer
You don’t need an actuary to find the gaps. Five questions usually surface them:
- Do you know what EDLI would pay each of your people?The answer depends on service history as well as wages.
- Do you have group term life, and how is the sum insured set?A flat amount for everyone, or a multiple of salary?
- Is anyone covered above the free cover limit without medicals done?Above that limit, cover can stay capped until the insurer’s checks are complete.
- Have you looked at the EDLI exemption route?Not to assume it, but to know whether it fits your workforce and what it would ask of you.
- Do employees know what their family would receive?Most don’t. Telling them is part of the benefit.
Frequently asked questions
What is EDLI?
EDLI, the Employees’ Deposit Linked Insurance scheme, is the life cover attached to an EPF account. If a member dies in service, the nominee receives a benefit set by the scheme, funded by the employer’s contribution.
Did the EDLI benefit go up when the EPF ceiling changed?
No. The wage ceiling moved from ₹15,000 to ₹25,000 from 17 September 2026, which raises the employer’s contribution, but the benefit bands are unchanged: ₹2.5 lakh to ₹7 lakh for members with twelve months’ continuous employment, and ₹50,000 to ₹1 lakh otherwise.
What is an EDLI exemption?
An employer whose own group life policy is better than EDLI for every member can apply to be exempt from EDLI. It needs an IRDAI-approved policy, majority employee consent, monthly returns and renewal every three years. It is an ongoing obligation and approval is not automatic.
Is group term life better than EDLI?
They do different jobs. EDLI is a statutory floor with a fixed maximum. Group term life is designed by the employer and can follow salary, so it usually gives cover closer to what a family would need. Many employers have both.
Can a broker help?
A broker’s duty under IRDAI regulation is to you, the client, not the insurer, so a broker can help you design group term life, assess whether an EDLI exemption fits, and, if there is a claim, fight it on the family’s behalf. That describes the effort put in, not a guaranteed outcome.
What happens when you talk to us
A 20-minute video call with a Growth Advisor. No obligation, and no quote pushed. It opens with a five-minute video from our founder on how the benefits stack works and why Ethika exists; the rest is your questions. You’ll leave with an honest read on your current cover and claims experience, and a straight answer on whether we can genuinely help, even if you never become a client.
20 minutes with a Growth Advisor. No obligation.
A note on this page. Everything here is general information, not insurance, legal, financial or tax advice, and nothing is an offer. Statutory figures are as at 17 September 2026, per the EPFO notification and the EDLI Scheme 2026; the employer contribution rate is 0.5% of wages up to the ceiling. What any group policy pays depends on its own wording. For advice about your situation, talk to us.