Varishtha Pension Bima Yojana Senior Citizens Plan 828

Lic Varishtha Pension Bima Yojana for Senior Citizens Plan 828 Details 

Maximum Limit of Investment under Pradhan Mantri Vaya Vandana Yojana is Rs. 15 lakhs per senior citizen as against the existing limit of Rs. 7.5  lakhs per family and extended the period  up to 31 March, 2020.

• Available to citizens aged 60 years and above. No maximum age limit.

• Pension would be on immediate annuity basis in monthly, quarterly, half-yearly or annual mode, varying, respectively, between Rs. 500 to 5000 (monthly), Rs. 1500 to 15,000 (quarterly), Rs. 3000 to Rs. 30,000 (half-yearly) and from Rs. 6,000 to Rs. 60,000 (annually), depending on the amount subscribed and the option exercised.

• The payout implies an assured return of 9% on monthly payment basis, which amounts to an annualized return of 9.38%. 

• Loan (up to 75% of subscribed amount) can be availed after 3 years from the Date of Commencement. Present interest rate is 9% compounded half yearly.

• On death, the full purchase price will be refunded to nominee. 

• Exit/surrender would be allowed after 15 years or earlier in special circumstances like critical / terminal illness of self or spouse.

• Payment will be through ECS or NEFT. 

Rebate: 

No Rebate is available under this plan.

Taxes: 

As per Tax laws, Taxes including service tax is applicable. Present year tax rate is 3.09 %. Policyholder has to pay the tax amount also while taking the policy. Tax amount which you pay on the purchase price is not considered for calculation of pension.

Surrender value:

The Varishtha Pension plan can be surrendered after 15 years. The surrender value payable is 100% Purchase Price means what we invested will be returned back if we want to withdraw after 15 years.

If any medical emergency exists for self or spouse then pension plan can be surrendered under exceptional circumstances, 98% of the purchase Price will be refunded back to the customer.

Pension Payable: 

Pension in the form of Annuity is payable to the pensioner during the life time of the pensioner as per the mode (yearly, half yearly, quarterly, monthly)  chosen by the pensioner.

Death Benefits: 

If Death Occurs, Nominee gets invested amount.

Suicide clause:  Not applicable

Locking period: 15 days. Policy Holder can return the policy if not satisfied with policy terms and conditions.

Assignments and Nominations: Possible

80C or 10(10D) tax benefits - Investment under this scheme does not qualify for any tax deduction under section 80C or 80CCD. Moreover, the pension income is taxable as per the tax slab of the pensioner.

Free Look Period - If you are not satisfied with the terms and conditions of this scheme, you may ask for a refund of your investment amount within 15 days from the date of receipt of the policy stating the reason of objections. The amount to be refunded within free look period will be the investment amount deposited by the investor less the stamp duty charges.

Premature Surrender - The policy can be surrendered after completion of 15 years. The investor will get the investment amount in full as the surrender value after 15 years. However, under exceptional circumstances, if the pensioner requires money for the treatment of any critical/terminal illness of self or spouse, then the policy can be surrendered before the completion of 15 years and the surrender value payable will be 98% of the investment amount.

Unfortunate Event - On death of the pensioner, the investment amount will be refunded in full to the nominee of the pensioner. However, as only the invested amount is refunded, there is no special insurance benefit available with this scheme.

Service Tax Exemption on VPBY Effective April 1, 2015

What I understand from the info available publicly, it will be effective April 1, 2015. If it is correct, what about all those investors who have invested in this scheme till date? I think they will definitely stand disappointed and rightly so. I think they should also be provided such benefit right from their date of investment. The government should once again think about it.

As far as investment in this scheme is concerned, I think service tax exemption has made this scheme a little more attractive as compared to fixed deposits or other small saving schemes. You can consider this scheme if you want a super safe investment avenue with reasonably high returns for yourself.

Lic Varishtha Pension Bima Yojana Table No 827 Chart including 3.09 % Tax

Lic Varishtha Pension Bima Yojana Table No 827 Form