While considering the current lower interest rate scenario, the government's move to offer an annual return of 9 percent was a bold one and a boon for the aged. Besides, the Centre also raised the tax rebate for senior citizens to Rs 20,000. As a result, their annual income of up to Rs 153,000 is now exempt from income tax. It also promised to keep deposit interest rates on some investments for the senior citizens at above 8 percent.

The pension scheme, which is open to any individual over the age of 55 years, has been a resounding success.

Till November 15, LIC had sold 183,000 policies under the scheme and collected a premium of Rs 3,278 crores (Rs 32.78 billion).

Under the scheme, the policyholders would have to pay only a rupee a day for getting themselves insured.

Text: Adur Pradeep

Pension scheme for the aged launched
Varishtha Pension Scheme: FAQ
Why pension plans are a must
Make an early start with a pension plan