What is Varishtha Pension Bima Yojana?

Hey Pal,

A programme created exclusively for senior citizens is called the LIC Varishtha Pension Bima Yojana. It is a pure retirement programme that offers the retiree a lifetime pension in the form of an immediate annuity. A series of payments paid to an annuitant at predetermined intervals constitute an annuity. After it was originally released in 2003, the LIC of India sold over 3.16 lakh policies for Rs. 6,095 crores due to its popularity.

• Lock-in Duration & Surrender: 

The 15-year lock-in period of the plan encouraged retirees to hold onto their investments for a very long time.

• In case of early surrender, the exit load is:

If someone needed money urgently due to a critical or terminal disease, they could surrender during the lock-in. Then, LIC would disburse a payment equivalent to 98 percent of the premium or purchase price. The remaining 2% is the exit load that LIC charges for cancelling the policy.

The LIC Varishtha Pension Bima Yojana does not require any medical examinations before purchase.

• Various Annuity Modes:

Annuitants of the LIC Varishtha Pension Bima Yojana can choose between monthly, quarterly, semi-annually, and yearly payout schedules. Following the date the purchase price is received, the first payout for each of these frequencies will occur one month, three months, six months, and one year later.

• Free look period:

The LIC Varishtha Pension Bima Yojana offers a 15-day free look period. In the event that the policy is cancelled during this time, the seniors will receive the full amount of the premiums that they have already paid.

After understanding what is Varishtha Pension Bima Yojana, let us focus on the benefits that one can avail of this Yojana.

• Immediately following the payment of the purchase price, LIC begins disbursing the annuity amount in accordance with the selected manner. The highest annual annuity sum set by LIC is Rs. 60,000. These annuities will keep coming till the senior citizen passes away.

• The Purchase Price is returned to the beneficiary, spouse, or family upon the senior's passing. The outstanding interest and any unpaid balance, if a loan was taken out, will be subtracted from the purchase price.

• This pension plan promised an annual assured return rate of 9%. The returns on your investment from the LIC Varishtha Pension Bima Yojana are significantly better than these other options, especially when you take into account the current interest rates for fixed deposits and savings accounts.

• After three years, policyholders may choose to borrow money against the coverage. The maximum loan amount under the LIC Varishtha Pension Bima Yojana is 75% of the purchase price you actually paid. The interest rate will be recouped by LIC on each pension instalment.

• In accordance with Section 80CCC of the Income Tax Act, tax advantages may be claimed on the purchase price.

I would like to conclude here about the LIC Varishtha Pension Bima Yojana. I hope this helps:)

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