Changes made by LIC in Pension Scheme for Senior Citizens

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Changes made by LIC in Pension Scheme for Senior Citizens

The rise in the cases of COVID-19 has contracted the economy, affecting our lives in more ways that one. The central banks over the world have reduced the interest rates to save their economy from falling into a downturn. The returns from bank FDs have gone below 7 percent-mark. Senior Citizens frequently rely upon banks’ FDs for a regular income. The Life Insurance Corporation of India (LIC) has as of late altered the interest rates of the PMVVY scheme. Senior Citizens as a part of the pension scheme will be offered an alluring investment option which gives over 7% returns in the midst of falling FD rates — Pradhan Mantri Vaya Vandana Yojana or PMVVY scheme.

Launched in 2017, this pension scheme for senior residents will pull in a fixed interest rate for FY 2020-21. The plan will give a guaranteed rate of return of 7.40% per annum in FY21. This plan will be available for sale for three financial years — up to March 2023. The pension scheme can be bought offline just as online from the LIC site. LIC has an authority to run the plan that offers a complete payout not surpassing Rs.15 lakh.

The policy has a duration of 10 years and for policies sold at the ending of the primary financial year (March 2021), the plan will give a guaranteed rate of return of 7.40% per annum, however will be payable month to month for the entire duration of 10 years. Senior citizens can draw a minimum pension of Rs.1,000 every month relying upon the amount invested in the plan. The maximum pension amount is limited at Rs. 9,250 per month. For policies sold during the next two years, the appropriate assured rate of interest will be reviewed and decided at the start of each financial year by the government. The minimum speculation has likewise been reexamined to Rs.1,56,658 for a pension of Rs.12,000 per annum and Rs.1,62,162 for getting a minimum pension amount of Rs.1000 every month under the plan.

The minimum price tag for monthly mode is Rs.1,62,162, Rs.1,61,074 for quarterly pension, Rs.1,59,574 for half-yearly mode, and Rs.1,56,658 for yearly mode. The maximum pension one can get under this plan will be Rs.9,250 per month, Rs.27,750 per quarter, Rs.55,500 half-yearly, and Rs.1,11,000 on yearly payout premise, LIC said. The total amount of price tag under all the policies under this plan and all the policies taken under earlier versions of the plan permitted to a senior resident shall not surpass Rs.15 lakh. The plan can be bought by a lump sum price tag and the pensioner has the alternative to pick either the amount of pension or the purchase price. At the hour of purchasing the plan, the pensioner person can choose monthly/quarterly/half-yearly or yearly modes of pension.

On survival of the retired person during the policy term, pension in arrears (at the end of each period as per mode chosen) will be payable, LIC stated, including that demise of the pensioner during the policy term, the price tag will be refunded to the nominee/legal heirs. If in case, the retired person lives through the policy term, the price tag and the final pension installment shall be payable. The policy additionally permits loans up to 75% of the purchase price after three policy years. The plan additionally considers untimely exit for the treatment of any basic/terminal ailment of self or spouse and the surrender value payable will be 98% of the price tag.

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