On Tuesday Union cabinet approved, Varishtha Pension Bima Yojana 2017 (VPBY), a pension scheme for senior citizens. The scheme will provide an assured pension based on a guaranteed rate of return of 8 per cent per annum for ten years.
If there is a shortfall between LIC generated return and the guaranteed 8 per cent return, it would be borne by the government.
Here are 10 things to know about Varishtha Pension Bima Yojana 2017.
1. What is VPBY?
With a lump sum payment, pensioners can buy a policy at the purchase price. A pension will then be payable monthly, quarterly, half-yearly or annually. The scheme states that it will provide an assured pension for ten years. The scheme will be launched by Life Insurance Corporation of India in this financial year.
The plan is aimed at providing financial security to the persons who are aged 60 years. Varishtha Pension Bima Yojana 2017 will provide an assured pension based on a guaranteed rate of 8% of interest for 10 years. Lowest age for taking VPBJ 2017 is 60 years.
3. Pension amount
The minimum pension that can be received under Varishtha Pension Bima Yojana will be Rs 500 and the highest is 5,000 per month.
4. Lock-in period
LIC Varishtha Pension Bima Yojana has a lock-in period of 15 years. There is surrender prior to 15 years for any health-related emergency critical situations of the pension scheme member, his/her spouse, then such surrender amount will be 98% of the purchase price. 11 Reasons Why You Should Have A PF Account?
5. Modes of payout
The subscriber will have the option to opt for a pension on a monthly, quarterly, half-yearly and annual basis. Varishtha Pension Bima Yojana annuitants can choose various modes of payouts. Monthly, quarterly, semi-annually and yearly payouts are available. The first of the payouts for each of these frequencies will be 1 month, 3 months, 6 months and 1 year from the date of receipt of premium respectively.
6. Mode of payment
The pension will directly add to pensioners bank account through ECS / NEFT. Cheque or demand draft will not be issued. The pensioner need not go anywhere to collect the pension amount.
7. Tax benefits
The normal pension received from LIC is taxable, but the premiums paid under Varishtha Pension Bima Yojana are exempt from Income tax under Section 80 C.
8. Loan against policy
Policyholder avail loan just after completion of 3 years. The highest possible loan amount will be 75% of the purchase price.
9. Benefits for the family
Pension under Varishtha Pension Bima Yojana can also be received by family including spouse and dependants of the policy holders. On the death of a pensioner, the nominee gets the invested amount back. 6 Government Backed Investment Schemes For Best Return And Less Risk
10. Free look period
LIC Varishtha Pension Bima Yojana pension plan offers a 15 day period from the date of receipt of the policy as a free look period. In case the policyholder is not satisfied with the new policy, the amount will be refunded after deducting stamp duty charge. Pay Your LIC Premiums Online And Avail These Benefits