Insurance Current Affairs

Union Cabinet approves Varishtha Pension Bima Yojana 2017

The Union Cabinet has given its approval for launching of Varishtha Pension Bima Yojana 2017 (VPBY 2017).  The scheme will be launched as part of Government’s commitment for financial inclusion and social security.

The scheme will be implemented through Life Insurance Corporation of India (LIC) during the current financial year i.e. FY 2016-17. It will be open for subscription for a period of one year from the date of launch.

Features of Scheme
  • The purpose of the scheme is to provide social security during old age and protect elderly persons aged 60 years and above against future fall in their interest income due to uncertain market conditions.
  • It will provide an assured pension based on a guaranteed rate of return of 8% per annum for ten years, with an option to opt for pension on a monthly, quarterly, half yearly and annual basis.
  • The Union Government will bear the differential return i.e., the difference between the return generated by LIC and the assured return of 8% per annum as subsidy on an annual basis.

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Union Cabinet gives approves Varistha Pension Bima Yojana, 2003 and Varistha Pension Bima Yojana, 2014

The Union Cabinet has given its ex-post facto approval for the Varishtha Pension Bima Yojana (VPBY) 2003 and Varistha Pension Bima Yojana (VPBY) 2014.

The Cabinet also granted approval for expenditure incurred on subsidy amount released to LIC for the both schemes.

Key Facts

  • VPBY was launched on 14th July, 2003 and was open till 14th August, 2015 and VPBY was launched on 14th August, 2014.
  • Both the schemes are closed for future subscriptions. These schemes were implemented through Life Insurance Corporation of India (LIC).
  • Both are pension schemes intended to give an assured minimum pension to Senior Citizens based on an assured minimum return on the subscription amount.
  • The pension is envisaged until death from the date of subscription, with payback of the subscription amount on death of the subscriber to the nominee.
  • The difference between the actual yield earned by LIC on the funds invested under the schemes and the assured return committed by Union Government is paid as subsidy to LIC.
  • The policies sold during currency of policy are being serviced as per the guaranteed 9% return assured by the Government.
  • As of March 2016, a total number of 3,17,991 annuitants are being benefited under VPBY 2014. Similarly, 2,84,699 annuitants are being benefited under VPBY- 2003.

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