Across the globe one of the chief concerns of the senior citizens is that they will outlive their savings and that affects their retired life. The reverse mortgage facility serves as a financial lifeline in such a scenario. Reverse mortgage scheme enables senior citizens to avail themselves of periodical payments from a lender against the mortgage of their house while remaining as the owner and occupying the house. This article describes this issue in detail.

Old age comes with its own share of problems. As a person grows older and his regular income dries up, his dependency on others can increase significantly. The rising healthcare expenses and little social security add to the problems. A financial lifeline for the old age people in this scenario would be a regular income stream that can help to meet the financial needs and maintain the current living standards. The reverse mortgage facility is one such product that allows senior citizens, i.e., persons above the age of 60 years to avail of periodical payments from a lender against the mortgage of his/her house while remaining the owner and occupying the house. Although the taxation issues have acted as deterrents to the growth of this market, this article concludes that the product `reverse mortgage' is very relevant for the Indian market and is bound to grow in the coming years.

Developed nations are faced with severe budgetary constraints in sustaining their current universal and liberal Old Age Social and Income Security (OASIS) programs and developing nations are slated to face acute problems in catering such needs of their elderly population. These constraints coupled with the emerging expectations on quality of life amongst the elderly would fuel a massive demand for innovative financial products tailored to the elderly. Some of the desired features of these financial products would include functioning as safe investment avenues, systematic liquidation of assets to finance consumption, managing longevity and inflation risks and imparting liquidity to illiquid assets.

Professional Banker Magazine, Reverse Mortgage Scheme, Indian Markets, Old Age Social and Income Security, OASIS, Reverse Mortgage Loan, RML, American Association of Retired Persons, Gross Domestic Products, GDP, Transfer of Property Act, Accounting Methods.