The Indian Government in the Union Budget 2014-2015, announced the revival of Varishtha Pension Bima Yojana as a pension scheme for senior citizens. The life Insurance Corporation of India (lIC) has now been given the sole privilege to operate this scheme. The plan can be purchased by payment of a lump sum purchase price depending upon the mode of payment. The pensioner has an option to choose either the amount of pension or the purchase price. The modes of payment are monthly, half-yearly, quarterly and monthly and shall be through ECS/NEFT only.
The maximum range of pension per annum is from Rs5,000 to 60,000 and the minimum range is from Rs500 to 6,000. The minimum entry age of a pensioner is 60. The pension rates for Rs1,000 purchase price per annum for different modes of pension payment are different. For yearly the rate is Rs93.8, Rs91.6 for half-yearly, Rs90.6 for quarterly and Rs90 for monthly. The policy can be surrendered after completion of 15 years and the surrender value payable will be refund of purchase price. loan facility is available after completion of three policy years. The maximum loan that can be granted shall be 75 per cent of the purchase price.
Taxes including service tax, if any, shall be as per the tax laws and the rate of tax as applicable from time to time. The amount of tax payable as per the prevailing rates shall be payable by the policy holder on purchase price.