LIC Senior Citizen Pension Scheme

LIC Senior Citizen Scheme

Life Insurance Corporation of India (LIC) is one of the leading life insurance companies in India that provides a range of insurance policies to its customers, irrespective of their age. The company thus caters to different people with diverse requirements. With its foothold in almost every corner of the country and even on an international scale, it makes insurance accessible to everyone, including senior citizens.

LIC has launched a multitude of schemes for senior citizens that would help them get a regular income in the form of a pension. Let’s take a look at them.

Different Types of Plans Under the LIC Senior Citizen Pension Scheme

1. Pradhan Mantri Vaya Vandana Yojana

Launched by LIC on May 4, 2017, Pradhan Mantri Vaya Vandana Yojana is a government pension plan exclusively designed for Indian residents above 60 years of age. Under the scheme, the amount to be invested is referred to as the 'purchase price'. Till March 2021, the policy will provide an assured pension of 7.4% payable every month. The scheme has now been extended till March 31, 2023.

Features

• The investor can invest up to INR 15 lakhs.
• After the completion of three policy years, the scheme offers liquidity with a loan facility for up to a maximum of 75% of the purchase price.
• Surrender Benefit is available but only in particular cases, such as the terminal illness of the pensioner or their spouse. The purchase price returned will be 98%.
• There are different modes of pension payment available that include yearly, half-yearly, quarterly, and monthly. The payment, however, can be processed through the Aadhaar Enabled Payment System or NEFT.
• If the policyholder dies during the policy period, the price of the annuity scheme will be refunded to the beneficiary.
• If the senior citizen survives till the end of the policy term, then the policyholder is likely to get the purchase price of the annuity along with the final pension installment.

Eligibility Criteria

• Minimum Entry Age: 60 years
• Maximum Entry Age: No limit
• Minimum Pension: Rs. 1,000 per month
• Policy Term: 10 years
• Maximum Pension: Rs. 9,250 per month

2. LIC New Jeevan Shanti

Launched as a non-participating single premium annuity plan, LIC New Jeevan Shanti comes with a range of annuity options. The policyholder has to choose between a Single Life and Joint Life deferred annuity. At the inception of the policy, the annuity rates are guaranteed, and annuities are payable after the period of deferment throughout the lifetime of the annuitant(s).

Key Features

• Under both policy variants, the death benefits remain the same: 105% of the purchase price or purchase price + accrued additional benefit on death - total annuity amount paid till the date of death (if any).
• After three months from the completion of the policy or expiry of the free-look period (whichever is later), you can easily apply for a loan against the policy.
• The annuity is paid in arrears (after 1 year, 6 months, 3 months, and 1 month) based on the mode of annuity payment.
• The policy can be surrendered at any time during the policy tenure.
• The decrease in the annuity is applicable according to the following (except for annuity payment frequency - yearly):

Last Updated on 09-02-2021

Eligibility Criteria

• Minimum Purchase Price: Rs. 1,50,000 subject to minimum annuity
• Maximum Purchase Price: No Limit
• Minimum Age at Entry: 30 years
• Maximum Age at Entry: 79 years
• Minimum Vesting Age: 31 years
• Maximum Vesting Age: 80 years

3. LIC Jeevan Akshay-VII

Under this scheme, the policyholder has to choose the type of annuity from different options upon payment of a lump-sum amount. At the inception of the plan, the annuity rates are guaranteed, and annuities are payable throughout life. Know more

Different Annuity Options

• Option A: Annuity for life.
• Option B: Annuity with a guaranteed period of 5 years and life thereafter.
• Option C: Annuity with a guaranteed period of 10 years and life thereafter.
• Option D: Annuity with a guaranteed period of 15 years and life thereafter.
• Option E: Annuity with a guaranteed period of 20 years and life thereafter.
• Option F: Annuity for the entire life with a return of purchase price.
• Option G: Annuity for life increasing at a simple rate of 3% p.a.
• Option H: Annuity for life with a provision for 50% of the annuity to the secondary annuitant if the primary annuitant dies.
• Option I: Annuity for life with a provision for 100% of the annuity payable as long as any of the annuitants live.
• Option J: Annuity for life with a provision for 100% of the annuity payable as long as one of the annuitants survives and purchase price return on death of the last survivor.

Key Features

• You can avail of a loan after completion of 3 months from the issuance of the policy or expiry of the free-look period (whichever is later).
• Get a free-look period of 30 days to check the terms and conditions of the policy and cancel it if not happy with it.
• There are 4 modes of annuity available: monthly, quarterly, half-yearly, and yearly.
• Only under options F and J can you surrender the policy after completion of 3 months from the issuance of the policy or expiry of the free-look period (whichever is later).

Eligibility Criteria

• Minimum Purchase Price: Rs. 1,00,000 subject to minimum annuity
• Maximum Purchase Price: No limit
• Minimum Age at Entry: 30 years
• Maximum Age at Entry: 85 years

Final Thoughts

Regardless of what policy you choose, the LIC senior citizen pension scheme may provide you with all the necessary benefits that can help secure your financial future after retirement. The above three schemes work in favor of pensioners and provide a saving option for a long time.