9% Varishtha Pension Bima Yojana from LIC for Senior Citizens

LIC Varishstha Bima Pension Yojana for Senior CitizensLIC Varishtha Pension Bima Yojana for Senior Citizens

Central Government has re-launched Varishtha Pension Bima Yojana (administered by LIC) on this independence day 15th August, 2014 for Senior Citizens. Varishtha Pension Bima Yojana provides 9% assured returns which are payable per month by way of pension. How good is Varishtha Pension Bima Yojana? What are the positives and negative about this Central Government Varishta Pension plan?



Also Read: How is HDFC Guaranteed pension plan scheme?

Features of Varishtha Pension Bima Yojana

  • Scheme opens between 15th August, 2014 to 14th August, 2015 (1 year period)
  • Minimum age : 60 years
  • Single premium payable between Rs 66,665 to Rs 6,66,665
  • Pension amount of Rs 500 to Rs 5,000 depending on the single premium paid.
  • Assured return of 9% per annum, which is payable per month. Annualised yield works out to be 9.38%. This pension is payable for the lifetime of the individual.
  • One can exit from this option after 15 years
  • A pension can be received every month, quarterly, half yearly and yearly
  • The nominee gets invested amount back in case of death of the pensioner during.

 Positives of Varishtha Pension Bima Yojana

  • 9% assured returns per annum, payable every month. Yield works out to be 9.38% per annum.
  • Pension plan from Central Government, hence zero risk investment option.
  • Good for low income earned weaker section people who would have got low retirement corpus.
  • Policy administered by LIC. Their expertise would help in the smooth running of the plan.

Negatives of Varishtha Pension Bima Yojana

  • Investment cannot be closed before 15 years. In case you need money for an emergency, you cannot get your money back before this period. Do not park your emergency money into this.
  • Pension received is taxable. In case you have other income along with this pension, your post tax return could be very low.
  • Maximum pension limited to Rs 5,000 per month where you cannot meet your expenses during retirement.

Also Read: How to get income post retirement through reverse mortgage loan option in India

Alternatives to Varishtha Pension Bima Yojana

  • One can consider taking a term insurance plan for the amount which you may intend (which the nominee would get in case of death of the insured) and balance, invest in a post office MIS scheme (offering 8.4% interest) or Post office Senior Citizens Saving schemes (SCSS) offering 9.2% or Bank FD for Senior Citizens offering 9.50% to 10% per annum. While your returns could be slightly lower side, these options are highly liquid in nature.
  • You can invest a partial amount of your retirement corpus in Varishta Pension Bima Yojana and balance in options indicated above. This way you would enjoy both the benefits.

LIC Chairman, SK Roy says “We are targeting 5 Lakh Senior Citizens under this scheme for the year 2014-15”

LIC would administer this pension plan and they expect Rs 10,000 Crores subscriptions, which would be used for the development of the country.

You can visit LIC website / LIC agent for subscribing to this pension plan.

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LIC Varishtha Pension Bima Yojana for Senior Citizens

Suresh KP


  1. Dear Priminister 

    It is my suggestion that you start a Health Insurance cover for the senior citizen who have retired and who do not have any regular income other than interest received of their retiral corpus. As in current scenerion it is important that you float a scheme for senior citzen to take care their health insurance at low cost. This will be a big reform and relife to senior citizen having limited income.

  2. I am also a retired person from a private industry. Certainly doubtful about the future and living in tension all the time. Living alone with wife. Both not enjoying good health. Having paid heavy income tax all through I find my self a totally abondoned person by our Govt.
    My humble request and proposal to the PM is that we strongly deserve at least the dearness allowance (DA) which is given to the pension earners and govt employees as revised from time to time.
    We are living in the same market where the price rise is common to all citizens. There can not be any argument against this.

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