Varishtha Pension Bima Yojana was re-launched by Finance Minister Arun
Jaitley in the Union Budget 2014-15. The scheme is available a limited period
from 15th August 2014 to 14th August 2015 for the benefit of citizens
aged 60 years and above. Under this scheme, the senior citizens would get
pension on fixed basis either on yearly or monthly basis which will provide
social security to senior citizens.
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Here are advantages and disadvantages pertaining
to the scheme. Advantages of Varishtha Pension Bima Yojana Individuals can take
payout in monthly, quarterly, half yearly, yearly manner. Loan facility is
available after completion of 3 policy years. The maximum loan that can be
granted shall be 75 per cent of the Purchase Price. 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.
There is no waiting
period, pension will be disbursed immediately as per your pay out plan. The
interest rate applicable for the scheme is at 9.38 per cent per annum on their
deposits as they are being paid on monthly basis. This can be a better option
in falling interest rate. 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. Disadvantages of Varishtha Pension Bima
Yojana Maximum investment allowed under this scheme is at Rs 6,66,665/- and
which will turn out to be Rs 5000/- monthly pension payout which is quite low
considering family and inflation.
Taxes including Service Tax, if any, will be
applicable as per tax laws and the rate of tax as applicable from time to time.
There is no tax benefit under Income tax law. The policy can be
surrendered only after completion of 15 years or only under exceptional
circumstances. The lock period is so high that it will be very difficult for
super senior citizen to make best use of it. If the interest rates in the
prevailing markets are higher than 9.38 per cent, you will be under loss and
will not be able to do much about it.
