Rights and Privileges of Senior Citizens

Two years back, the Reserve Bank of India (RBI) instructed banks to provide doorstep banking services to senior citizens above 70 years of age and to the differently-abled people. Recently, I visited a leading private bank to enquire about the process for my mother. I was shocked to know that nobody at the bank, including the branch manager, was aware of this. In fact, one of the bank employees was adamant that there was no such service for savings account holders. I even tried to show him the bank’s website that clearly stated they offered such a service. After a few phone calls and online research, the bank employees realised that their bank does indeed offer such a service.

If service providers who are in the business of banking, many of whom are young and tech-savvy, are not aware of special services for senior citizens, then how can we expect old people to be aware of something that is not widely advertised? It is for this very reason that I decided to write about some areas that senior citizens can benefit from.

At old age, there are two major things to be taken care of – having a regular source of income and being able to meet expenses for medical emergencies. Given below are some government-supported schemes and banking facilities for senior citizens above the age of 60 years.

Before I start, let me add that the schemes that I would be discussing are only indicative. I do not endorse or represent any particular company or scheme. I have covered policies and plans offered by public enterprises like Life Insurance Corporation (LIC). However, the same plans are also offered by some private enterprises. You are advised to take cues from the points mentioned here and research further before making any investments or decisions. With this caveat, let’s begin!

Senior Citizens Savings Scheme (SCSS)

The first and the most popular one in this category is the Senior Citizens Savings Scheme (SCSS) that is available through certified banks and post offices across India. An individual can invest a maximum amount of Rs 15 lakhs in an SCSS account. It helps senior citizens generate a regular income at around 8.6% per annum rate of return. It has an average tenure of five years that can be extended for another three years. It not only offers assured returns while keeping your investment amount safe but also offers tax benefits.

Pradhan Mantri Vaya Vandana Yojana (PMVVY)

PMVVY is a pension plan for senior citizens that is managed by LIC. As per the scheme, a senior citizen can pay an initial lump sum amount ranging from a minimum of Rs 1.5 lakhs to a maximum of Rs 7.5 lakhs, and get an assured monthly pension based on a guaranteed rate of return of 8% per annum. Like SCSS, this scheme too gives tax benefits and assures safety of the investment amount.

Life Insurance Company’s Varishtha Pension Bima Yojana

LIC’s Varishtha Pension Bima Yojana provides an assured pension to senior citizens for 10 years. It is a single premium pension plan with a cap of Rs 6.7 lakhs. The best part is that payments start immediately after the payment of premium. The plan offers an assured return of 9% per annum.

Reverse Mortgage

Reverse mortgage is a popular option in some countries outside India. In fact, it has quite a number of takers even in India. This option was introduced in India a decade back to help provide a source of income for senior citizens who do not have adequate means to support themselves, but own assets like a house.

Senior citizens can take a loan against their self-acquired or self-occupied house and generate a regular source of income from it at a frequency of their choice. The best part about the scheme is that the borrower is not expected to service the loan during his/ her lifetime. After death of the beneficiary, either the legal heirs can pay back the amount used by him/her or the bank can sell off the property to pay off the amount paid by it, giving the balance to the legal heirs.

As must be obvious by now, this scheme is a lifeline for those senior citizens who do not have any source of income like pension, for those who do not have any savings to support themselves, and for those who do not have anybody to take care of them. If such people were fortunate enough to have bought a house during their earning years, then that very house can become a source of regular income in their old age.

Health Insurance for Senior Citizens

While schemes like SCSS and reverse mortgage help generate a regular source of income for senior citizens, medical insurance helps them in times of their medical emergencies. Given the gigantic medical expenses these days, it is advisable that everybody has some form of a kitty for medical emergencies or at least a medical insurance. Old age is one time where medical expenses are likely to mount while the income usually dwindles.

The general perception is that no company would give health insurance to the old. Well, the good news is that there are some mediclaim policies from public and private health insurers that cater to senior citizens like National Insurance Company’s Varishtha Mediclaim Policy for Senior Citizens. They can help senior citizens cover their medical expenses to an extent. Even though the sum insured amount in such cases is very small when compared to those for younger people, it is always a help when medical bills stack up.

Banking Facilities

We have taken care of income and expenses for senior citizens, but how do they manage their money? Bank accounts are inevitable for anybody who has money. The government helps senior citizens not only with the generation of a regular source of income and management of their expenses but also provides special services for their banking needs.

As mentioned earlier, some time back, the government introduced doorstep banking for senior citizens above the age of 70 years, where they can avail basic services like cash withdrawal and deposit, delivery of demand drafts, submission of Know Your Customer (KYC) documents, etc at their homes without having to visit the bank. Some of these services are free while others come for a nominal fee.

What’s interesting is that banks have been mandated to automatically convert a fully KYC compliant account into a senior citizen account on the basis of date of birth of the account holder. The senior citizens are not expected to run around for this.

There are many other privileges for senior citizens at banks like separate counters, facility to send someone else to collect a chequebook, issuance of a chequebook with a minimum of 25 leaves, deposit of life certificates at any branch of their pension paying bank, higher interest rates for fixed deposit or savings account, etc that make things easier for them.

& Many More…

If the aforementioned schemes and policies made you happy, you would be glad to know that the privileges do not end there. The government accords many more privileges to senior citizens like tax concessions, travel booking discounts and an option to seek a preferential hearing for their court cases, to name a few. Surely, India ‘cares’ for its old.

It is always important to know about one’s rights if one expects to benefit from them. This becomes especially true for senior citizens or people taking care of them. The government and even our society give the senior citizens some privileges that they have every right to avail. Let us spread a word about these and help those people who took care of us when we were kids. Most importantly, don’t forget, their ‘today’ would be our ‘tomorrow’.

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About the Author: Shobhika Puri

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