LIC Senior Citizen Scheme

LIC Senior Citizen Scheme

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LIC Senior Citizen Pension Scheme

The government has been taking many initiatives time and again to protect Senior citizens of India. People above 60 years of age deserves many prerogatives. Having an understanding of the same and problems related to old age, government has launched many plans that can provide financial aid to senior citizens of our country. At times it becomes quintessential to provide them this benefits. This is because of many reasons. Few of them are as follows.

  1. Retirement Age :- After crossing age of 60 most of them are retired or approaching retirement as they may not be that active. One of the major concerns of many after crossing that age or becoming senior citizens is how to manage their monthly expenses. Keeping that in mind government of India authorized Insurance companies like LIC to come up with some plans. LIC of India keeps on coming with plans which are customized for senior citizens. We will discuss the same in details below.
  2. Old Age :- Another challenge any senior citizen in our country faces is managing growing age. In old age, they are not so active and efficient as they work young. They may not be in position to invest the same amount of energy as compared to when they were young.
  3. Illness :- Senior Citizens are more prone to illness. This is because their immunity becomes weaker after a certain age. So they need some assured returns which can be taken from some pension plans.
  4. Lack of Support System :- Some of them may not get the kind of support they want from their kids. As their children might be working in other cities and they may have their own commitment. At the time of need, they should have some funds to manage themselves.Which can be possible if they have some investment which can act as a savior.
  5. Financial Freedom :- We need financial freedom after adulthood. More so when we cross some age. Specially when we cross 60, its required even more. This is because our resources are less and needs are more.
  6. Additional Income :- Financial need may vary from Individual to individual. Some may have a source of Income but they may need additional Income to meet some ad-hoc expenses. That can be anything based on their expenses. It can be gifts for grandchildren or relatives and many more.
  7. Better Lifestyle :- No one wants to compromise on their existing lifestyle. At the time of retirement, we need to have good planning to sustain the same. We must have monthly Income equivalent to our standard of living. This can be possible by generating an additional source of Income .LIC senior citizens plans are good investments which can assist in giving the life that we desire.
  8. Lead Dignified Life :- Self-respect can be maintained by not extending hands in front of anyone for financial needs. With these attractive schemed launched my LIC this has been possible with ease.

Types of Senior Citizens Plans and Criteria

The government has completely authorized LIC under norms of IRDA to design customized plans for senior citizens security. Some of them can be taken in early years to gather corpus for the pension.While some are launched only after attaining the age of 60 years. All such plans which can be beneficial for senior citizens are as follows.

Sno. Senior Citizen Insurance Plans
1 Pradhan Mantri Vaya Vandana Yojana (PMVVY)
2 Varishtha Pension Bima Yojana (VPBY)
3 Senior Citizen Saving Schemes
4 New Jeevan Nidhi
5 Jeevan Akshay VI

All these plans have one feature or the other which offers lots of benefits to the senior citizens. Top 2 customized plans have been launched in 2014 & 2017. They are Varishtha Pension Bima Yojana i.e VPBY and Pradhan Mantri Vaya Vandaya Yojana (PMVVY).

Others plans are also focussed on the need of senior citizens.We will discuss them in detail.

1. Pradhan Mantri Vaya Vandana Yojana (PMVVY)-May 2017-18

This plan has been launched in May 2017 for the period of 1 year only for people who were 60 years and above. As per this plan, Senior citizens can get 8% on there Investment. Policy duration is for 10 years. After the maturity policyholder can get monthly income. In case of death of the policyholder, their spouse or nominee can get that amount. Besides that, at the time of critical illness, they can also surrender the policy. And the policyholder can get 98% of the invested amount. Not only this they are also entitled to get Loan on this. However, that can be availed only after the locking period of 3 years. Amount of loan can be equivalent to 75% of Sum Invested. Besides that Investment can be done in regular monthly; quarterly; bi-annually and yearly Intervals. The amount may vary as per period. Details as per the period have been tabulated below.

Period of Investment Minimum Purchase Price Maximum Purchase Price
Monthly Payment Rs. 1,50,000 Rs. 7,50,000
Quarterly Payment Rs. 149068 Rs. 7,45, 342
Bi-Annually Rs. 147601 Rs. 7,38,007
Yearly payments Rs. 144578 Rs. 7,22,892

Because of ease of Installments in this plan, it was in news for quite some time. Many people have availed this plan . Also Pension Plans that it offers are tabulated below. However amount one gets is based on the Investment. Like flexibility of Investment, there is ease of taking the Income after the policy as well. Based on the intervals we have minimum and maximum as shown below.

Pension Period Minimum Pension Amount Maximum Pension Amount
Monthly Payment Rs. 1000 Rs. 3000
Quarterly Payment Rs. 3000 Rs. 15000
Bi-Annually Rs. 6000 Rs. 30000
Yearly payments Rs. 12000 Rs. 60000

2. Varishtha Pension Bima Yojana (VPBY)

This plan was launched during August 2014-15. The minimum age for investment as per this plan is 60 years with no maximum age. Policy term is of 15 years with the flexibility of payment as tabulated below.

Period of Investment Minimum Purchase Price Maximum Purchase Price
Monthly Payment Rs. 66,665 Rs. 6,66,665
Quarterly Payment Rs. 66,170 Rs. 6,61,690
Bi-Annually Rs. 65,430 Rs. 6,54,275
Yearly payments Rs. 63,960 Rs. 6,39,610

Under this plan, almost Rs. 3.16 lakh annuities have already been registered with a corpus of Rs. 6,095 crores. We get the pension based on our Investment. Some of the details has been mentioned below.

Pension Period Minimum Pension Amount Maximum Pension Amount
Monthly Payment Rs. 500 Rs. 5000
Quarterly Payment Rs. 1500 Rs. 15000
Bi-Annually Rs. 3000 Rs. 30000
Yearly payments Rs. 6000 Rs. 60000

3. Senior Citizens Saving Schemes - Senior Citizens is conglomerate of all the plans.Policyholders who are Senior citizens can get interested up to 8.5 %. Lic policy plans are designed keeping in mind basic needs of the policyholders. Major among them are like the high rate of returns at the time of retirements.

4. New Jeevan Nidhi - As per this plan we can have a dual benefit of life coverage and Pension benefits at vesting age. After paying for certain age we can avail the benefits of pension at the time of vesting.

5.Jeevan Akshay VI - This is an Immediate annuity plan . Can be taken after immediate payment of lump sum amount. This is good for people who want to save their money. Its smarter way of getting some assured monthly income with some additional benefits.

The above policies are quite comprehensive and also quite related to Pradhan Mantri Atal Pension Yojana . They are launched keeping in mind the rising need of pension in India. This policy is more or less like compulsory pension for the people above 60 years of age. It is based on Pradhan Mantri Jan Dhan yoga. It was launched in the year 2015 to help unorganized sector. People working in private companies not covered in any pension plans can also enroll for this scheme. Pension can start from anywhere between Rs1000 to Rs. 5000 after 60 years of age. However Pension funds as per PFRDA are completely at discretion of government of India.

All these Policies for Senior Citizens has got great features which offer good benefits for the policyholders. Same has been explained below.

Features of Senior Citizens Plans

Some of key features of major Senior Citizens plan is listed below.

  1. There are flexible Pension payment plans. It can be done monthly, quarterly, bi-yearly or yearly.
  2. Payment is done through NEFT or Adhaar based payment system.
  3. Maximum Loan that can be guaranteed is 75% of the amount invested.
  4. The interest rate on Loan is 10% payable bi-annually.
  5. Free Lookup period is available within 15 days of purchase of policy; with refund equivalent to the purchase price of the policy.
  6. Few policies like PMVVY & VPBY are launched under the specialized scheme for benefits of senior citizens for a limited period. Their main objective was to hike the interest rates as compared to the banks.

Benefits of Senior Citizen Plan

These plans offer one or other benefits. Some of the major ones applicable to few of the polcies are tabulated below.

Sno. Benefits
1 Tax Savings
-As per section 80 C these policies helps in tax savings.
2 Loan Facility available
-After locking period of 3 years ; loan upto 75% of amount Invested can be taken.However this is applicable only for few policies like PMVVY & VPBY
3 Better Interest Rates upto 8.5%
4 Assured Income Monthly ; quarterly or yearly after the policy term.
5 In case the policyholder who is senior citizen dies during pension period time than his nominee can get the amount.
6 On the maturity of the policy there are additional benefits that are directly related to amount of policy.
7 At the time of critical illness, policy can be surrender with 98% returns.

How to Buy LIC policy and check the status of policies?

We can buy LIC policy either Online or offline. There are a couple of steps in both. We need to adhere to same to get our policy instantly. Most of the methods are as follows.

Online Offline
Register to e-portal of LIC Contact Agent
We can also take it from any web aggregators Call the call centers operational 24* 7
Submit the required Documents SMS on the concerned number to get call back
Make the payments Visit the Branch
Complete the KYC
Make the Paymemts as per required plans

After buying the policy we must be also curious to check various details time and again. We can check the details in various ways based on what all details we require. Based on the same there are certain steps we should follow to check out policy status as follows.

Sno Type of Status How to check Online How to check offline
1 Checking the Policy renewal date We can log in with our policy credentials and check the same with ease. We can check it offline though sms or by talking to concened agent.
2 Checking the surrender Value Surrender value at the time of any critical illness can also be checked online. It will be based on the amount invested till date. Also equivalent to 98% of our total amount. We can also calculate it manually. Alternatively can drop the SMS to the concerned person.Or can call the customer care operational 24*7
3 Checking the Loan amount The loan, as we know, is given after the locking period as per our plan . It is equivalent to 75% of the amount paid. We can easily check it only Offline more or less the process remains the same. What we need to do is check with the agent or send the SMS to the concerned person. Usually, the response is quite prompt.
4 Checking the maturity date The maturity date is usually depended on our policy plan. It can be anywhere between 10 to 15 years. However, if we lose the track of the same we can easily check the same online We can follow the same process as in the above cases. Either we can call the agents; drop SMS or call the support center.

Pension plans are great initiative launched by the government of India to promote a culture of Saving and Investments. Many Indians have largely benefited from such plans. Lakhs of people have already invested and build a huge corpus of funds. In a way, they have secured their future with assured amount during vesting. At the same time policyholders are availing many benefits through such plans during investment stage. Major being the Tax savings and other financial needs like loan and surrender etc. It's also advisable to make plans as per our needs and requirements. We can also take more than one plan; especially if we want to get better returns on Investment. Premium can be easily calculated with the help of online calculators. This will help in making our financial planning even better.