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The Government of India announced the revival of the Varishtha Pension Bima Yojana (VPBY) in the Union Budget 2014-2015. The VPBY is administered through the Life Insurance Corporation (LIC). The VPBY benefits senior citizens aged above 60 years and offers them income security with a guaranteed rate of return.
Under the VPBY, the pensioners can buy a policy at the purchase price by paying a lump sum. After buying the policy, a pension will be payable monthly, half-yearly, quarterly or annually. The pensioners can choose a pension payment frequency according to their convenience and needs.
The LIC Varishtha Pension Bima Yojana is available for citizens aged above 60 years. There is no maximum age limit under this yojana.
Below are the features of the LIC Varishtha Pension Bima Yojana:
Lock-in period: The VPBY has a lock-in period of 15 years.
Inclusion: The policyholders can avail of a loan after the completion of three years up to a maximum of 75% of their purchase price. The loan interest will be recovered from the annuity payments.
Surrender: In case of any critical illness, the policyholders can surrender this pension yojana within 15 years of opening. They will receive up to 98% of the single premium paid. If the policyholder surrenders the policy after the completion of 15 years, then they can get up to 100% returns on the single premium paid.
Cancellation: The policyholders have the option to cancel this policy within 15 days of receipt of the policy documents, provided there is no claim.
The VPBY gives annuity payouts for senior citizens (policyholders) in the form of an immediate annuity plan. It is a single premium policy. A single premium policy means that the policyholders need to pay a lump sum amount at the purchase of the pension policy. After paying the lump-sum premium, the policyholders are eligible for a regular pension.
The policyholder can opt for receiving pension monthly, half-yearly, quarterly or annually during his/her lifetime. The pension is also payable to the family of the policyholder. In case the policyholder dies, there will be a refund of the purchase price of the pension. The pension policy offers an assured pension based on a guaranteed 8% rate of return per annum for ten years.
The LIC VPBY offers four modes of premium payment, which are as follows:
The minimum and maximum premium payment for each payout mode are as follows:
|Period of Investment||Minimum Premium Payment (Rs.)||Maximum Premium Payment (Rs.)|
The LIC VPBY offers pension to the policyholders based on their premium payment/investment. The minimum and maximum pension amount for each pension period are as follows:
|Period of Investment||Minimum Pension Amount (Rs.)||Maximum Pension Amount (Rs.)|
The policyholder must also submit the Existence Certificate at specified time intervals in the proforma of LIC.