Everything you should know about Varishtha Pension Bima Yojana

         Varishtha Pension Bima Yojana:

  

The Varishtha Pension Bima Yojana 2017, a pension scheme for senior citizens which offers provides guaranteed interest rate to senior citizens. It is the immediate annuity plan with the single premium payment option, where the annuity starts immediately after premium payment (i.e. from the  chosen date).This plan is a limited period pension plan so one can opt for Varishtha Pension Bima Yojana  within the period of one year from the date of launch. (i.e. 4th May 2017 - 03 May 2018).

Ø   Varishtha Pension Bima Yojana is available through Life Insurance Corporation of India (LIC).

Ø  It is aimed at providing income security to elderly persons aged 60 years and above against a future fall in their interest income due to uncertain market conditions.

Ø  The scheme will provide an assured pension based on a guaranteed rate of return of 8 per cent for 10 years.

Ø  Senior citizens can opt for pension on a monthly/quarterly/half-yearly or annual basis under the scheme.

Ø  Minimum pension per month is Rs.1,000, quarterly is Rs.3,000, half yearly is Rs.6,000 and yearly is Rs.12,000.

Ø  Maximum monthly pension in this plan is monthly Rs.5,000, quarterly Rs.15,000, half yearly Rs.30,000 and yearly Rs. 60,000.

Ø  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.

Ø  On the death of the pensioner during the policy term, the Purchase Price will be refunded to the nominee (or legal heirs in absence of nominee).

Ø  If the pensioner survives up to the end of the policy term, Purchase Price and final installment of the pension will be paid to the pensioner.

Ø  Loan is available under the plan after the completion of 3 years upto maximum of 75% of the purchase price . The interest on the loan will be recovered from the annuity payments.

Ø  The policy can be surrendered under exceptional circumstances like money required for the treatment of any critical/terminal illness of self or spouse . The Surrender Value payable shall be 98% of Purchase Price.

Ø  2% exit load charges will be deducted if the policy holder chooses to withdraw entire amount.

Ø  No, there is no tax deduction for this investment. Moreover, the pension received is also taxable as per the tax bracket of the investor.

  The below table contains Investment & Monthly Pension Details of the scheme:

Conclusion: Considering the falling interest rate scenario it is the best option available for senior citizens who fall in the lower tax bracket.