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LIC Senior Citizen Monthly Income Schemes in 2024

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The Life Insurance Corporation of India (LIC) is a cornerstone in the nation's insurance sector, offering a plethora of insurance and investment products to cater to the diverse requirements of its vast customer base.

Pension plans and schemes, addressing the financial needs of senior citizens post-retirement, occupy a significant space among the wide range of offerings of LIC. In a phase of life where consistent income becomes paramount, pension schemes act as a safety net and ensure that retirees can lead a life of dignity and financial independence.

This article dives deep into LIC monthly income schemes for senior citizens in 2024, presenting an insightful overview of each plan along with its key details.

What are LIC Senior Citizen Monthly Income Plans?

LIC Monthly Income Pension Plans, often referred to as annuity plans with a monthly payout feature, stand as vital retirement or annuity tools that promise consistent monthly financial inflows for individuals in their post-retirement phase.

Crafted with precision, these plans are intended to guarantee that retirees receive an uninterrupted flow of funds. This way, these plans contribute to the financial security of senior citizens and help them uphold their desired way of living.

Benefits of LIC Monthly Income Schemes for Senior Citizens

Listed below are some of the advantages of LIC monthly income schemes-

  • Fostering a Future-Ready Approach: LIC retirement solutions for senior citizens stand out as exemplary instruments for thoughtful retirement preparation. The core aim of these pension plans is to safeguard the financial well-being of individuals in their golden years.
  • Cultivating a Savings Culture: Obtaining these plans nurtures a disciplined savings attitude. Instruments like PMVVY and LIC New Jeevan Shanti, for instance, not only serve as a savings vehicle but also harness the power of compounding to amplify wealth over time.
  • Tailored for Post-Retirement Life: These senior citizen-centric plans are crafted recognising the distinct financial needs that arise post-retirement. They cater specifically to the nuances of a retiree's life, ensuring that the transition into this new phase is smooth and devoid of financial hiccups.
  • Ensuring Family Security with Death Benefits: Beyond offering retirees a regular income, these plans underscore the importance of financially protecting loved ones. In the unfortunate event of the policyholder's demise, the death benefits come into play and provide the necessary financial cushion to the family, thereby continuing to protect their interests.
  • Sustained Financial Independence: One of the hallmarks of these monthly income schemes is their commitment to preserving the financial independence of retirees. By guaranteeing a steady monthly inflow, they fortify the economic resilience of senior citizens, ensuring they continue to thrive in their post-professional years.

Best LIC Monthly Income Schemes for Senior Citizens

Some of the best LIC monthly income schemes for senior citizens are mentioned below along with their benefits –

Pradhan Mantri Vaya Vandana Yojana (PMVVY)

Introduced by LIC for the elderly in 2017, the PMVVY can be purchased until March 2024. As of 2024, the scheme offers a 7.4% monthly interest, which is entirely taxable. This scheme is sought-after due to its impressive returns.

Features and Advantages

  • Tailored for individuals aged 60 and above with an investment cap of INR 15 Lakh
  • Available both online and offline — premiums can be paid online directly through the holder’s account
  • The plan spans 10 years and offers an annual return at the rate of 7.4%, disbursed monthly. If opted for an annual pension mode, the rate increases to 7.66%.
  • Monthly pension can range from INR 1,000 to INR 9,250.
  • Pension frequency options include monthly, quarterly, half-yearly, or yearly.

Primary Benefits

  • If the pensioner outlives the policy, the accrued pension is disbursed. However, if the pensioner passes away during the term, the nominee is given the initial investment.
  • After the third year, the policyholder can borrow up to 75% of the investment.
  • For early withdrawal, 98% of the initial investment is returned. Keep in mind that surrender is only allowed under exceptional situations like terminal illness of the policyholder or their spouse.

LIC New Jeevan Shanti Plan

This is a one-time premium deferred annuity scheme. It offers Single Life and Joint Life Deferred Annuity variations, with the latter covering two individuals with equal pension entitlements.

Features and Advantages

  • Death benefits remain constant for both single or joint-life versions. Nominees will get 105% of the Purchase Price or the combined Purchase Price and additional death benefit, whichever is greater.
  • The death benefit modes are provided in lump-sum, instalments, or annual basis, decided at policy onset.
  • Joint-life coverage can include spouses, offspring, siblings, parents, grandparents, or grandchildren. Note that the secondary policyholder must be at least 35 years old.
  • The pension is disbursed in arrears with the frequency chosen at the beginning.
  • The guaranteed interest rate decreases for half-yearly, quarterly, and monthly annuities by 2%, 3%, and 4% respectively.

Primary Benefits

  • After three months, loans against the policy can be availed, although the interest shouldn’t exceed 50% of the pension or 80% of the surrender value.
  • The policy can be surrendered anytime.
  • Pension starts from the 31st policy year.
  • Pension is taxable, but tax deductions are applicable under section 80C. Death benefits are tax-exempt.
  • Online purchases made directly from LIC can bring a 2% discount. Both online and offline acquisitions are available.
  • A 15-day (offline) and 30-day (online) free look period is granted.

LIC Jeevan Akshay – VII

This fixed-benefit scheme offers predetermined pension amounts. As a single premium plan, it requires only a one-time payment.

Features and Advantages

  • Four pension payment options: yearly, half-yearly, quarterly, and monthly
  • Ten annuity choices are available, with options A-G for single life and H-J for joint life.
  • Only F and J options return the initial investment to the nominee after the policyholder's demise.
  • Joint purchases can be made with family members.
  • Special provisions for differently-abled dependents, including reduced minimum limits for annuity and investment.

Primary Benefits

  • Only survival or, in some instances, death benefits are provided.
  • Online purchases and premium payments are facilitated.
  • National pension subscribers have no minimum pension constraint.
  • High investments attract rebates, which can enhance the pension.
  • The death benefit mode can be changed anytime during the policyholder's life.
  • Premiums have tax benefits under section 80C, though the pension is taxable. Death benefits remain tax-free.
  • Policy surrender and loans are available after 3 months, but only for F and J options.

Over to You

In the ever-evolving financial landscape, ensuring a stable income post-retirement is paramount, especially for senior citizens. LIC, as one of India's most trusted insurance entities, offers an array of monthly income schemes tailored for the elderly.

The Pradhan Mantri Vaya Vandana Yojana stands out with its commendable interest rates and flexibility while the LIC New Jeevan Shanti Plan, with its deferred annuity structure, allows both single and joint coverage, ensuring wider inclusivity. Lastly, the LIC Jeevan Akshay – VII offers an excellent choice in terms of a fixed benefit plan, providing clarity and predictability for its policyholders.

Each scheme has its unique set of features and benefits, catering to varied financial requirements and goals. Senior citizens can wisely select from these schemes for a comfortable and financially secure retirement. Investing in these plans promises not only financial stability but also peace of mind in one's golden years.

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