LIC Senior Citizen Pension Scheme
LIC of India
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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 it.

Different Types of Plans Under the Senior Citizen Pension Scheme

1. Pradhan Mantri Vaya Vandana Yojana

Launched by LIC on 4th May 2017, Pradhan Mantri Vaya Vandana Yojana is a government's pension plan, which is exclusively designed for people above 60 years of age (Indian residents). Under the scheme, the amount to be invested is referred to as '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 in particular cases like terminal illness of the pensioner or his/her spouse. The purchase price returned will be 98%.
  • There are different modes of pension payment available that include yearly, half-yearly, quarterly, and even monthly. The payment, however, can be processed through 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. 1000 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 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 the policy variants, the death benefits remain the same- 105% of 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 the 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).

Mode

Percentage Reduction in

(Yearly) annuity rate

Half-yearly

2%

Quarterly

3%

Monthly

4%

**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 the scheme, the policyholder has to choose the type of annuity from different options on 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: It comes with an annuity for life.

Option B: It comes with a guaranteed period of 5 years and life thereafter.

Option C: It comes with a guaranteed period of 10 years and life thereafter.

Option D: It comes with a guaranteed period of 15 years and life thereafter.

Option E: It comes with a guaranteed period of 20 years and life thereafter.

Option F: It comes with an annuity for the entire life with a return of purchase price.

Option G: It comes with an annuity for life increasing at a simple rate of 3% p.a.

Option H: It comes with an annuity for life with a provision for 50% of the annuity to the secondary annuitant if the primary annuitant dies.

Option I: It comes with an annuity for life with a provision for 100% of the annuity payable as long as any of the annuitant lives.

Option J: It comes with an 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: 1, 00,000 subject to minimum annuity
  • Maximum Purchase Price: No limit
  • Minimum Age at Entry: 30 years
  • Maximum Age at Entry: 85 years

Annuity Mode

Monthly

Quarterly

Half-Yearly

Annual

Minimum Annuity

Rs. 1,000

Rs. 3,000

Rs. 6,000

Rs. 12,000

**Last Updated on 09-02-2021

Final Thoughts

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

Frequently Asked Questions (FAQs)

1. Can Pradhan Mantri Vaya Vandana Yojana be canceled after buying?

Yes. Within the ‘free-look period’ stated in the policy, the investment made under the Pradhan Mantri Vaya Vandana Yojana can be canceled. For offline policies, the scheme comes with a free-look period of 15 days whereas, for online policies, it is 30 days. Once the policy will be canceled, the total purchase will be refunded back to the investor after deducting charges related to stamp duty and pension paid.

2. Can Pradhan Mantri Vaya Vandana Yojana policy be surrendered anytime during the policy term?

Yes, during the policy term of 10 years, surrender is allowed in Pradhan Mantri Vaya Vandana Yojana. But the surrender may only be done in exceptional cases like terminal illness care for self or spouse. Once the surrender has been completed, the company would pay 98% of the purchase price.

For example, if the investor’s spouse is diagnosed with an illness at an age of 70, the investor can surrender the policy to meet the requirement. If the investor had invested 10, 00,000, then he/she will get 98% of the total amount, i.e. INR 9, 80,000.

3. Is it safe to buy these policies online?

Yes, absolutely. LIC is a very trusted platform and you can easily buy from its website without worrying about the safety of your data.

Last updated on 09-02-2021