Government of India in the Union Budget 2014-2015, announced
the revival of Varishtha Pension Bima Yojana. Excerpts from
budget speech by Honorable Finance Minister are, "NDA
Government during its last term in office had introduced the
Varishtha Pension Bima Yojana (VPBY) as a pension scheme for
senior citizens. Under the scheme a total number of 3.16 lakh
annuitants are being benefited and corpus amounts to Rs.6,095
Crore. I propose to revive the scheme for a limited period from
15th August 2014 to 14th August 2015 for the benefit of citizens
aged 60 years and above“
LIC of India has been given the sole privilege to operate this
a. Pension Payment:
During the lifetime of Pensioner, a pension in
the form of immediate annuity as per mode
chosen by the Pensioner shall be payable.
b. Death Benefit:
On death of the Pensioner the Purchase Price
shall be refunded.
4. Eligibility Conditions & Other
a) Minimum Entry Age: 60 years (completed)
b) Maximum Entry Age: No limit
c) Minimum Pension:
Rs. 500/- per month
Rs. 1,500/- per quarter,
Rs. 3,000/- per half-year
Rs. 6,000/- per year
d) Maximum Pension:
Rs. 5000/- per month
Rs. 15,000/- per quarter,
Rs. 30,000/- per half-year
Rs. 60,000/- per year
Ceiling of maximum pension is for a family as a whole i.e. total amount of
pension under all the policies issued to a family under this plan shall not
exceed the maximum pension limit. The family for this purpose will
comprise of pensioner, his/her spouse and dependants.
5. Payment of Purchase Price
The plan can be purchased by payment of a lump sum Purchase Price. The
pensioner has an option to choose either the amount of pension or the Purchase
The minimum and maximum Purchase Price under different modes of pension will
be as under:
Mode of Pension Minimum Purchase Price Maximum Purchase Price
Yearly Rs 63,960 Rs 6,39,610
Half Yearly Rs 65,430 Rs 6,54,275
Quarterly Rs 66,170 Rs 6,61,190
Monthly Rs 66,665 Rs 6,66,665
The Purchase Price to be charged shall be rounded to nearest multiple of Rs.5/-.
6. Mode of Pension Payment
The modes of pension payment are monthly,
quarterly, half-yearly & yearly. The pension
payment shall be through ECS/NEFT only.
The first installment of pension shall be paid
after 1 year, 6 months, 3 months or 1 month
from the date of purchase of the same
depending on the mode of pension payment
i.e. yearly, half-yearly, quarterly or monthly
7. Sample Pension Rates
The pension rates for Rs.1000/- Purchase Price
for different modes of pension payments are
Yearly: Rs. 93.8069 p.a.
Half-yearly: Rs. 91.7045 p.a.
Quarterly: Rs. 90.6767 p.a.
Monthly: Rs. 90.0000 p.a.
The pension installment shall be rounded off
to the nearest rupee.
These rates are not age specific.
8. When first installment of annuity is
First installment of annuity is payable after
one month, three months, six months or one
year from the date of purchase of annuity
depending on the mode chosen is monthly,
quarterly, half yearly or yearly respectively.
9. Salient Features
Premium is to be paid in a lump sum.
Minimum purchase price :
Rs.100,000/- for all distribution channels except
Rs.150,000/- for on line sale.
No medical examination is required under the plan.
No maximum limits for purchase price, annuity etc.
Minimum allowed age at entry is 30 years
(completed) and Maximum allowed age at entry is 85
Age proof necessary.
10. Incentives for High Purchase Price
If your purchase price is Rs. 2.50 lakh or more,
you will receive higher amount of annuity due to
available incentives. In addition of this, for
policies sold online, a rebate of 1% by way of
increase in the annuity rate shall also be
11. Surrender Value
The policy can be surrendered aftercompletion
of 15 years. The Surrender Value payable will be
refund of Purchase Price. 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 shall be 98% of Purchase Price.
Loan facility is available after completion of 3 policy years. The
maximum loan that can be granted shall be 75% of the Purchase
The rate of interest to be charged for loan amount would be
determined from time to time by the Corporation.
Loan interest will be recovered from pension amount payable
under the policy. The Loan interest will accrue as per the
frequency of pension payment under the policy and it will be
due on the due date of pension. However, the loan outstanding
shall be recovered from the claim proceeds at the time of exit.
13. Cooling-off Period
If a policyholder is not satisfied with the "Terms
and Conditions of the policy, he/she may return
the policy to the Corporation 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 shall be the Purchase Price deposited by
the policyholder after deducting the charges for