Central Bank of India, a public sector bank, and Star Union Dai-ichi (SUD) Life Insurance Company have jointly launched a scheme that would help senior citizens looking to liquefy their property.

As per the scheme, the bank offers mortgage loan against the residential property of senior citizens, which amount is used to purchase life time annuity from the insurer. The owner and spouse receive monthly annuity throughout their lifetime. After their demise, the insurance company returns the principal amount to the bank, said a press release.

“Central Bank is the only bank which offers the reverse mortgage for entire lifetime of the applicants and the applicants do not have to make any repayments during their lifetime,” it added.

The applicants should be above 60 years of age with or without an income stream. They must, however, own a residential property.

“The bank lends a mortgage loan on low rate of interest – lesser than education loan. After the demise of the beneficiaries and return of the principal amount from the insurance company, they give option to the heirs of the deceased to pay back the accrued interest and redeem the property. Otherwise they would sell the property, adjust the loan account, and pay surplus amount to the heirs. No other property or estate or assets or heirs of the beneficiaries is required to pay or settle the loan balance,” said Avni Boradia, Product Manager of Star Union Dai-ichi.