Pension Security for Senior Citizens with Ayushman Bharat Vay Vandana Yojana

The Ayushman Bharat Vay Vandana Yojana (AB-VBY) is a pension scheme primarily designed to provide a steady income to senior citizens in India, ensuring that they are financially secure during their post-retirement years. This scheme was launched by the Government of India under the Pradhan Mantri Vaya Vandana Yojana (PMVVY). It targets citizens aged 60 and above, offering them a safe and assured return on their investments in the form of a pension.

Let’s dive deeper into its features, benefits, and how to avail of it.

What is Ayushman Bharat Vay Vandana Yojana (AB-VBY)?

The Ayushman Bharat Vay Vandana Yojana is an initiative designed to provide senior citizens with a regular pension, ensuring financial stability during their old age. The scheme provides an attractive rate of return and eliminates the need for extensive investments or complicated financial planning. The idea behind the scheme is to ensure that seniors receive a fixed income regardless of fluctuations in the financial market, thus shielding them from economic uncertainties.

Key Features of the Ayushman Bharat Vay Vandana Yojana:

1. Eligibility Criteria:

• Age Limit: The scheme is available for senior citizens aged 60 years and above.
• Citizenship: The applicant must be an Indian citizen.

2. Mode of Investment:

• The scheme allows investment through a lump sum payment, which then guarantees a fixed monthly or annual pension to the investor.
• The minimum amount that can be invested is ₹1,50,000, and the maximum investment limit is ₹15,00,000.

3. Pension Amount:

• The pension amount depends on the lump sum investment, the chosen pension frequency (monthly, quarterly, half-yearly, or yearly), and the prevailing interest rate.
• The monthly pension can range from ₹1,000 to ₹9,250 per month for the maximum investment of ₹15 lakh, depending on the investment amount and the chosen frequency.

4. Interest Rate:

• The pension scheme offers an attractive interest rate of 7.4% annually (subject to changes by the government), which is higher than the returns from many fixed-income instruments like bank FDs.
• This interest is compounded and paid to the pensioner according to the chosen payment frequency.

5. Duration of the Scheme:

• The tenure of the scheme is 10 years. After 10 years, the investor has the option to either reinvest the amount in a new pension scheme or withdraw the lump sum principal.

6. Standard Pension Payment:

• The pension is provided to the individual in either monthly, quarterly, half-yearly, or yearly intervals, as per the choice made during enrollment.
• The choice of the frequency affects the overall amount of pension you receive, but the pension payment will remain fixed throughout the scheme’s tenure.

7. Loan Facility:

• After the completion of 3 policy years, the pensioner can avail of a loan of up to 75% of the invested amount.
• The loan needs to be repaid with interest during the policy tenure. The loan facility makes the scheme more flexible for senior citizens who might need financial assistance during emergencies.

8. Tax Implications:

• The pension received is taxable as income under the head “Income from Other Sources.” The invested amount does not attract tax, but the interest earned is taxable.
• There are no direct tax exemptions under Section 80C or other tax-saving provisions for investments made under this scheme.

9. Death Benefits:

• If the policyholder passes away before the completion of the 10-year term, the nominee or legal heirs will receive the purchase price (principal amount) back, ensuring that the investment is not lost.
• This makes the scheme a safe option for elderly individuals who may want to provide some financial relief to their families.

10. No Medical Check-ups:

• One of the major benefits of the scheme is that there are no medical check-ups required for enrolling. This makes it an easy and accessible scheme for senior citizens who may not be in the best health condition.

Benefits of the Ayushman Bharat Vay Vandana Yojana (AB-VBY):

1. Guaranteed Regular Income:

• The most significant advantage of the AB-VBY scheme is the provision of a guaranteed monthly pension for senior citizens, thus reducing dependency on others and ensuring financial independence in old age.

2. High Return on Investment:

• The scheme offers an attractive interest rate of 7.4% annually, which is better than the returns offered by many other savings instruments like fixed deposits, government bonds, etc.

3. Flexible Payment Options:

• The scheme provides flexibility in how the pension is paid out – you can opt for monthly, quarterly, half-yearly, or yearly payments depending on your preferences.

4. Loan Facility for Emergencies:

• The scheme allows senior citizens to avail of a loan up to 75% of the principal amount after 3 years, making it easier to access funds in case of financial emergencies.

5. No Risk Involved:

• Since the scheme is backed by the Government of India, it offers a zero-risk investment. Senior citizens do not have to worry about market fluctuations or inflation eroding their returns.

6. Easy Application Process:

• The application process is simple and can be completed either online through LIC’s website or offline by visiting an LIC branch. Both options ensure that the process is accessible to a wide range of senior citizens.

How to Apply for the Ayushman Bharat Vay Vandana Yojana:

1. Online Application:

• Visit the official LIC website to fill in the online application form.
• Complete the KYC process, choose the investment amount, select the pension payment mode, and make the payment.
• After successful enrollment, the pensioner will receive an Aadhar-linked certificate or Pension Card.

2. Offline Application:

• Visit your nearest LIC branch or meet an LIC agent to apply for the scheme.
• The agent will guide you through the process and help fill out the application form.
• Upon successful processing, you will receive your Pension Card.

Ayushman Bharat Vay Vandana Yojana Card (Pension Card):

After enrolling in the scheme, each beneficiary is issued a Pension Card or an Enrollment Certificate, which includes details like:

• Name of the Pensioner
• Date of Birth
• Pension Amount
• Mode of Pension Payment
• Policy Number
• Terms & Conditions of the Scheme

The Pension Card serves as a key document, ensuring the recipient’s enrollment and can be used to track pension payments and other related services.

Conclusion

The Ayushman Bharat Vay Vandana Yojana is a highly beneficial and secure scheme for senior citizens in India who are looking for a steady income post-retirement. With its guaranteed returns, pension options, and government backing, it helps seniors maintain financial independence without the stress of investment decisions.

For elderly citizens, this scheme can be a lifeline, offering both financial security and peace of mind. The scheme’s easy access and simple application process make it a viable option for many in need of assured monthly income during their later years.