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What is the primary objective of the Employees Deposit Linked Insurance (EDLI) Scheme?
- a)To provide health insurance coverage
- b)To offer term life insurance benefits to employees
- c)To offer retirement benefits to employees
- d)To provide housing loans to employees
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
What is the primary objective of the Employees Deposit Linked Insuran...
The primary objective of the Employees Deposit Linked Insurance (EDLI) Scheme is to offer term life insurance benefits to employees, particularly in cases where such benefits may not be commonly provided by employers. This scheme, managed by the Employees Provident Fund Organisation (EPFO), aims to provide social security benefits to private sector employees and their families, ensuring financial protection in the unfortunate event of the employee's demise.
(Note: The EDLI scheme provides term life insurance coverage for member employees based on their last drawn salary, with benefits determined accordingly.)
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What is the primary objective of the Employees Deposit Linked Insuran...
Objective of the EDLI Scheme
The Employees Deposit Linked Insurance (EDLI) Scheme is primarily designed to provide financial security to employees in the event of their untimely demise. The key features of this scheme are outlined below:
Life Insurance Benefits
- The EDLI scheme offers term life insurance benefits to employees who are members of the Employees' Provident Fund Organisation (EPFO).
- In case of the death of an employee while in service, the nominee or legal heir is entitled to receive a lump sum amount from the insurance fund.
Coverage Amount
- The insurance coverage under the EDLI scheme is linked to the employee's provident fund account balance.
- The maximum benefit amount can be up to Rs. 7 lakhs, providing significant financial support to the family of the deceased.
No Premium Contribution
- One of the unique features of the EDLI scheme is that it does not require any premium payment from the employees.
- The employer contributes to the insurance coverage as part of the statutory requirements under the EPF scheme.
Importance for Employees
- The EDLI scheme acts as a safety net for employees and their families, ensuring financial stability during challenging times.
- It helps alleviate the financial burden on the family, allowing them to cope with the loss of a breadwinner.
In summary, the primary objective of the EDLI Scheme is to offer term life insurance benefits to employees, providing essential financial protection for their families in the event of an unexpected tragedy. This makes option 'B' the correct answer.
The Employees Deposit Linked Insurance (EDLI) Scheme is primarily designed to provide financial security to employees in the event of their untimely demise. The key features of this scheme are outlined below:
Life Insurance Benefits
- The EDLI scheme offers term life insurance benefits to employees who are members of the Employees' Provident Fund Organisation (EPFO).
- In case of the death of an employee while in service, the nominee or legal heir is entitled to receive a lump sum amount from the insurance fund.
Coverage Amount
- The insurance coverage under the EDLI scheme is linked to the employee's provident fund account balance.
- The maximum benefit amount can be up to Rs. 7 lakhs, providing significant financial support to the family of the deceased.
No Premium Contribution
- One of the unique features of the EDLI scheme is that it does not require any premium payment from the employees.
- The employer contributes to the insurance coverage as part of the statutory requirements under the EPF scheme.
Importance for Employees
- The EDLI scheme acts as a safety net for employees and their families, ensuring financial stability during challenging times.
- It helps alleviate the financial burden on the family, allowing them to cope with the loss of a breadwinner.
In summary, the primary objective of the EDLI Scheme is to offer term life insurance benefits to employees, providing essential financial protection for their families in the event of an unexpected tragedy. This makes option 'B' the correct answer.
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What is the primary objective of the Employees Deposit Linked Insurance (EDLI) Scheme?a)To provide health insurance coverageb)To offer term life insurance benefits to employeesc)To offer retirement benefits to employeesd)To provide housing loans to employeesCorrect answer is option 'B'. Can you explain this answer?
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