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Steady and regular income is one of the biggest concerns for senior citizens. Post-retirement, financial independence becomes difficult. Pension plans are an escape from issues like this. Also known as retirement plans, pension plans require you to invest a certain part of your savings for a fixed period of time and then help you to avail steady income after retirement.
LIC Vaya Vandana Yojana is one such government-launched pension scheme designed exclusively for senior citizens.
Read further to understand what is LIC Vaya Vandana Yojana and how it is beneficial for senior citizens.
Under this scheme, senior citizens are offered a guaranteed interest on the principal amount invested by them. The interest rate starts from 8% and can go up to 8.3%. The interest is given for a period of 10 years, and is payable monthly.
The scheme has also been exempted from the Goods and services tax or the GST. The sole right to operate the Vaya Vandana Yojana has been given only to the LIC by the government. LIC has been offering this scheme from its launch date, 4th May 21017.
Here are a few key features of the policy:
LIC Vaya Vandana Yojana is one of the government’s flagship policy offering numerous benefits, some of them are:
The most significant benefit of the policy is a steady and fixed income for the senior citizens in the form of a pension. This ensures the financial independence of the policyholder till the end of the policy tenure, 10 years.
Returns at a fixed assured rate are guaranteed to the insured for a period of ten years. These rates are age-independent but they might vary for different policyholders depending upon the mode of payment chosen by them.
After the completion of three years of the payment tenure, the loan facility can be availed. A loan of up to 75% of the amount invested can be taken, the interest recovery of which is made from the interest paid to the policyholder. The recovery of the final loan amount is however made from the final claim of the policy.
The policyholder has the independence to choose the pension payment interval as per his needs. He may choose to receive his pension monthly, quarterly, half-yearly, or yearly.
Pension planning is a way to ensure a healthy and independent life post-retirement. Starting off with it at an early age can be highly beneficial in the long run and help you have a backup plan for maintaining your financial stability.