Varishtha Pension Bima Yojana (VPBY)

Government of India in the Union Budget 2014-2015, announced the revival of Varishtha Pension Bima Yojana (VPBY) for a limited period from 15th August 2014 to 14th August 2015 for the benefit of citizens aged 60 years and above.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.

VPBY is like reverse of a normal insurance policy as in case of VPBY, the beneficiary gets an income at the overall rate of 9.38 % per annum on their deposits as they are being paid on monthly basis.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 resource mobilization for the development of the country.

Under this revived Varishtha Pension Bima Yojana (VPBY), the senior citizens would get pension on fixed basis either on yearly or monthly basis which will provide social security to senior citizens.On death of the Pensioner, the Purchase Price shall be refunded.

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 Price.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 respectively.
The policy can be surrendered after completion 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 Price.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.

Some key features of the scheme are:
  • Available to citizens aged 60 years and above. 
  • 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. 
  • 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.

No comments:

Post a Comment

Related Posts Plugin for WordPress, Blogger...