Last updated on August 5, 2020
It is a pension scheme exclusively for senior citizens aged 60 years & above. This scheme can be purchased offline as well as online through LIC, which has been given sole privilege to operate this scheme.
- Scheme provides assured return of 8% p.a payable monthly for 10 years.
- The scheme is exempted from Service Tax/ GST.
- Death Benifit: On death of the pensioner during the policy term of 10 years, the Purchase Price shall be paid to the beneficiary.
- Surrender Value: The scheme also allows for premature exit for the treatment of any critical/ terminal illness of self or spouse. On such premature exit, 98% of the Purchase Price shall be refunded.
- Maturity Benefit: On survival of the pensioner to the end of the policy term of 10 years, Purchase price along with final pension instalment shall be payable.
- Loan: After 3 policy years, the policy allows loan up to 75% of purchase price.
Update: [20-May-2020] [Source: PIB]
- Pension Scheme extended till 31st March 2023 from earlier 31st March of 2020
- To allow initially an assured rate of return of 7.40 % per annum for the year 2020-21 per annum and thereafter to be reset every year.
- Annual reset of assured rate of interest with effect from April 1st of financial year in line with revised rate of returns of Senior Citizens Saving Scheme (SCSS) upto a ceiling of 7.75% with fresh appraisal of the scheme on breach of this threshold at any point.
- Approval for expenditure to be incurred on account of the difference between the market rate of return generated by LIC (net of expenses) and the guaranteed rate of return under the scheme.
- Capping Management expenses at 0.5% p.a. of funds of the scheme for first year of scheme in respect of new policies issued and thereafter 0.3% p.a. for second year onwards for the next 9 years.
- Delegating the authority to Finance Minister to approve annual reset rate of return at the beginning of every financial year
- The minimum investment has also been revised to Rs.1,56,658 for pension of Rs.12,000/- per annum and Rs.1,62,162/- for getting a minimum pension amount of Rs.1000/- per month under the scheme.
All other terms and conditions of the scheme remaining the same.