Varishtha Pension Bima Yojana (VPBY) – Eligibility, Benefits, Tax
Varishtha Pension Bima Yojana (VPBY). The NDA Government during its last term in office had introduced the Varishtha Pension Bima Yojana (VPBY) as a pension scheme for senior citizens. Government of India in the Union Budget for the financial year 2014-2015, announced the revival of ” Varishtha Pension Bima Yojana” (VPBY).
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Varishtha Pension Bima Yojana (VPBY)
Government of India in the Union Budget for the financial year 2014-2015, announced the revival of ” Varishtha Pension Bima Yojana” (VPBY).
Honorable finance Minister Shri Arun Jaitley said in his Budget Speech, “NDA Government during its last term in office had introduced the Varishtha Pension BimaYojana (VPBY) as a pension scheme for senior citizens.
Beneficial to whom?
Varishtha Pension Bima Yojana (VPBY) will benefit the vulnerable section of society with limited resources as it will provide monthly pension ranging from Rs 500/ to Rs 5,000/ per month to senior citizens of the country. The subscription to the scheme is likely to create a corpus of more than Rs. 10,000 crore, and would thus also be a significant source of financial resource mobilization for the development of the country.
Must Read – National Pension Scheme
Pension is on Monthly or yearly basis?
Subscribers to this scheme (senior citizens) would get pension on fixed basis either on yearly or monthly or quarterly or half yearly basis which will provide social security to senior citizens, at their age of no earning condition.
1.In the form of pension :
During the lifetime of a Pensioner, pension in the form of annuity as per mode chosen by the Pensioner i.e., monthly or yearly shall be payable.
2.Benefits on death :
On death of the Pensioner, the Purchase Price i.e., total deposit made by the subscriber shall be refunded to the nominees.
Must Read – National Savings Certificate (NSC)
Eligibility criteria :
1.To become a subscriber of this scheme one should be of 60 years old or above..which means that Minimum Entry Age is 60 years. And maximum age limit is not there.
A) Rs. 500/- per month.
B) Rs.1,500/- per quarter,
C) Rs.3,000/- per half a year
D) Rs.6,000/- per year.
A) Rs.5000/- per month
B) Rs.15,000/- per quarter,
C)Rs.30,000/- per half year
D)Rs.60,000/- per year.
Must Read – Atal Pension Yojana
Ceiling limit for pension :
Total amount of pension under all the policies issued to a family under this plan shall not exceed the maximum pension limit.
Family for this purpose will comprise of pensioner, his or her spouse and Dependants.
Purchase Price :
This 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 Price.
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. 6,61,690/-|
|Monthly||Rs. 66,665/-||Rs. 6,66,665/-|
Must Read – Pradhan Mantri Jeevan Jyoti Bima Yojana
Sample Pension rates per Rs.1000/- Purchase Price
The pension rates for Rs.1000/- Purchase Price for different modes of pension payments are as below:
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 instalment shall be rounded off to the nearest rupee.
These rates are not age specific.
Must Read – Employee Pension Scheme
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 instalment 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 respectively.
The policy can be surrendered after completion of 15 years. The Surrender Value payable will be the amount of Purchase Price. However, under exceptional circumstances, if the pensioner needs 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.
Must Read – Sukanya Samridhi Yojana
Loan against plan :
Loan facility is available after completion of 3 policy years. The maximum loan that can be granted shall be 75% of the Purchase Price.
Interest rate to be charged on this loan amount will be determined by the government of India for every year as like in case of SSY scheme.
This plan is ideal for those who can receive consider lump sum amount at the time of retirement and they can purchase this plan so that financial assistance in the form of pension will be available to them at their stage of no earnings.
Taxes including Service Tax, if any, shall be as per the Tax laws and the rate of tax as applicable from time to time.
The amount of tax payable as per the prevailing rates shall be payable by the policyholder on Purchase Price. The amount of Tax paid shall not be considered for the calculation of benefits payable under the plan
Free Look 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 Stamp duty
Life Insurance Corporation of India
Central Office, Yogakshema,
Jeevan Bima Marg,
Mumbai – 400021.
Registration Number : 512