Varishtha Pension Bima Yojana: 5 Things You Need To Know
Varishtha Pension Bima Yojana provides pensions to senior citizens within a month of purchasing the plan. Learn about the policy features, returns, pension amount and other benefits.
Varishtha Pension Bima Yojana provides pensions to senior citizens within a month of purchasing the plan. Learn about the policy features, returns, pension amount and other benefits.
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Varishtha Pension Bima Yojana, launched in 2003 and operated by the Life Insurance Corporation (LIC) of India, is a one-time premium pension plan that provides senior citizens a monthly pension within 30 days of paying the first policy premium. People aged 60 and older can purchase this policy and get a monthly pension of up to Rs 5,000 or Rs 60,000 annually. Here are some key features of Varishtha Pension Bima Yojana.
The purchaser will get a 15-day free-look period during which the subscriber can review the policy features and, if unsatisfied, unsubscribe from the plan. There are no charges if the subscriber returns the policy within the free-look period, and the premium paid will be returned. The scheme has a 15-year lock-in, but it can continue life-long upon providing a life certificate.
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The scheme allows premature exits under exceptional circumstances like a terminal illness or total incapacitation which may require urgent money. However, a premature exit will attract a 2 per cent penalty on the accumulated corpus, and the rest of the money will be returned to the policyholder. Varishtha Pension Bima Yojana offers policyholders a 9.3 per cent interest on investments annually, as such, it could be great pension option for senior citizens.
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Policyholders can receive pensions monthly, quarterly, half-yearly, and annually. Additionally, they can avail of a loan facility if they have held the policy for at least three years. After three years of opening the account, the policyholder can take a loan of up to 75 per cent of the policy purchase price. The loan’s equated monthly instalments (EMIs) will be deducted from the annuity.
Contributions towards Varishtha Pension Bima Yojana get tax relief up to Rs 1.5 lakh in a financial year under section 80C of the Income-tax Act, 1961.
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Moreover, if the policyholder dies, LIC will return the purchase price to the beneficiary, who could be a spouse or other nominee. In case of any outstanding loan repayment issues, LIC will deduct the unpaid loan amount and the interest accrued from the purchase price before returning the remaining balance.
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Retirement is considered a relaxed stage in a life devoid of worries and a never-ending line-up of urgencies. But for singles, retirement could come with its own set of unique challenges
While it may not suit everyone, it definitely provides a roadmap for those who dream of retiring early and pursuing their passions without financial constraints.
A senior citizen card is a certificate provided by a state government to people aged 60 and older to enable them to access various welfare services meant for this age group.
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