The finance minsitry has indicated that contributors to the newly launched Varishtha Pension Bima Yojana could withdraw the amount of contribution during their lifetime, a senior Life Insurance Corporation official said on Monday.

"Only today there was a suggestion from the finance ministry that some relief might be granted to contributors in the form of allowing them to withdraw the money even during their life time, but this should not be before 15 years of commencement of the policy," LIC regional manager M Kumar told reporters in Kolkata.

Varishtha Pension Scheme: FAQ

Kumar also said that certain income tax relief might also be granted to the pensioners for amount of contribution and also the pension amount.

"The matter has been referred to the Central Board of Direct Taxes on whether there could be relief under section 80 CCC," he said.

According to existing rules of the new pension scheme, pension was to paid during the lifetime of the pensioner and in the event of death of the pensioner, purchase price was to be paid to the nominee or legal heir.

There is no provision as of now for withdrawal of contribution amount during the lifetime of pensioner and also for any income tax relief.

Relax pension scheme norms: Naik

Union Minister for Petroleum and Natural Gas Ram Naik on Monday suggested that the provision to allow only one individual in a family to take benefit of Life Inurance Corporation's 'Varishta Pension Bima Yojana' should be relaxed.

Naik, who launched the pension linked insurance scheme and universal health insurance scheme in Mumbai, said, "There could be two earning members in a family with a need for pension benefit".

Similarly, the current stipulation to give benefit under health insurance scheme up to 65 years should be lifted as people above this age bar also need healthcare, Naik pointed out.

Naik's suggestions came in response to the Union Finance Minister Jaswant Singh's statement seeking inputs to modify these schemes, which were launched by Prime Minister Atal Bihari Vajypaee, at a function in New Delhi on Monday.

On LIC's pension scheme, Naik said, "Even though low interest rates is beneficial to trade and business, it is a worrisome factor for senior citizens who depend on interest income especially on bank deposits".

The government would help LIC to bridge any gap in return on investment and nine per cent rate assured under the pension scheme, the minister said.

State-owned New India Assurance Company Ltd's chairman and managing director R Beri said New India has set a target to issue 20 lakh (2 million) policies under universal health insurance scheme and accumulated corpus worth Rs 50-60 crore (Rs 500-600 million).

The company had already commenced health scheme promotion and issued nine policies since morning, Beri added.