Thirty per cent of policies sold under Varishta Pension Bima Yojana launched by the prime minister, have come from rural India.

The finance ministry had recently remarked that the target group had not been effectively tapped.

Yet as per the latest figures available with the Life Insurance Corporation of India, Varishta Bima has mopped up over Rs 800 crore (Rs 8 billion) with the sales just a little under 43,000 policies across the country as of July 31.

LIC chairman S B Mathur had earlier told Business Standard that he estimated a total collection of Rs 2,000 crore (Rs 20 billion) during the fiscal from Varishta Bima.

However, going by the present performance, it is likely LIC will well exceed expectations with another eight months to go till the end of the fiscal.

Sales are being pushed through LIC's 900,000 strong agency force as well as its 120 corporate agents.

The average size per policy sold in rural India amounts is less than Rs 150,000, against that of Rs 190,000 to 200,000 in urban areas.

LIC officials said that it would take more time to propagate the policy to the rural masses as they were not "pension-minded".

Varishta Bima is targeted at senior citizen over the age of 55 years and offers an assured return of nine per cent till the death of the policyholder in terms of an immediate pension plan.

Much of the population in rural India prefers investing in fixed deposits of cooperative banks, "as they like to see their bank balances," said officials.

The 15-year lock-in period for investment in Varishta Bima has been a hindrance in the marketing of the policy among the rural population. Most have shown a preference for short-term investments of not more than three to five years.

LIC officials added that marketing in rural areas poses additional difficulty considering the minimum amount that has to be invested.

The minimum investment has been capped at Rs 33,335, a sum which poor rural folks may not necessarily have in liquid funds. This would get a monthly pension of Rs 250 for policyholders.

Maximum policies continue to be sold in the states of Maharashtra and Gujarat (western zone) with a total sales of 17,000 policies mopping up Rs 327 crore (Rs 3.27 billion).

The second highest sales have been from the eastern zone with a mop up of Rs 120 crore (Rs 1.20 billion) premium through the sale of 7,000 policies.

The southern zone equally performed well with the sale of 6,000 policies mopping up Rs 99 crore (Rs 990 million) in premium.

The north central zone did not fare as well, with sales of just 1,700 policies and a premium collection of Rs 32 crore (Rs 320 million).

Similarly, in northern zone, LIC mopped up Rs 96 crore (Rs 960 million) in premium with the sale of 4,600 policies.

The highest premium average per policy sold in southern central and northern zones stands at over Rs 2.05 crore (Rs 20.5 million). This is as against a low average of Rs 1.65 crore (Rs 16.5 million) in the southern zone.

Though the western zone sold the maximum number of policies and mopped up the highest premium, its average per policy amounts to less than Rs 2 crore (Rs 20 million).