The plan provides for an immediate pension for seniors aged 60 and over.
The PMVVY is a government-sponsored scheme and pension payments are guaranteed by the government.
Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a pension scheme launched by the Government of India in 2017. The system offers a guaranteed pension to seniors aged 60 and over. The system is administered by the Life Insurance Corporation of India (LIC).
The PMVVY is a government-sponsored scheme and pension payments are guaranteed by the government. The program aims to provide financial security to seniors and help them cover their expenses after retirement.
The government communicates the period of availability of the system. Currently, the program is available until March 31, 2023.
The differential return, ie the difference between the return generated by LIC and the guaranteed return per year, is borne annually as a subsidy by the Indian government.
Annuity is payable at the end of each period during the 10 year policy term according to the monthly/quarterly/semi-annual/annual frequency selected by the subscriber at the time of purchase.
In 2018, the Union Cabinet chaired by Prime Minister Narendra Modi had given its approval to widen the investment limit from Rs 7.5 lakhs to Rs 15 lakhs.
The minimum investment has also been changed to Rs. 1,56,658 for a pension of Rs. 12,000 per annum and Rs. 1,62,162/- for a minimum pension amount of Rs. 1000 per month under the scheme.
Under the PMVVY, seniors can invest a lump sum in the scheme and receive a guaranteed pension for 10 years. Pension rates under the scheme are fixed, ranging from 7.40% to 7.66% per annum, depending on the type of pension payment chosen (monthly, quarterly (7.45%), semi-annually (7.52%) or annually).
Pradhan Mantri Vaya Vandana Yojana by LIC: Functions
- A medical examination is not required.
- Early withdrawal is permitted during the life of the policy in exceptional circumstances such as critical/terminal illness of one’s own or spouse. The surrender value to be paid in such cases is 98% of the purchase price.
- The loan is available under the policy after 3 years of insurance. The maximum loan granted is 75% of the purchase price.
Pradhan Mantri Vaya Vandana Yojana by LIC: Plan
- The plan provides for an immediate pension for seniors aged 60 and over. It can be purchased by paying a lump sum.
- The plan provides for annuity payments of the specified amount for the contract period of 10 years with purchase price repayment at the end of 10 years.
- Annuity payment modes are available: monthly/quarterly/semi-annually/annually
- The annuity is paid at the end of each period according to the chosen payment mode and starts already in the next month if the monthly mode is chosen.
- On the death of the pensioner at any time during the 10 year term, the purchase price will be returned to the legal heirs/nominees.
- If the pensioner survives until the end of the contract period of 10 years, the purchase price is due together with the last pension installment.
- Only resident Indians are eligible to purchase this plan.
Eligibility requirements and other restrictions:
a) Minimum entry age: 60 years (completed)
b) Maximum entry age: No limit
c) Term of the policy: 10 years
d) Minimum pension: Rs 1,000 per month
Rs 3,000 per quarter
Rs 6,000 per semester
12,000 rupees per year
e) Maximum pension: Rs 9,250 per month
Rs 27,750 per quarter
Rs 55,500 per semester
Rs 1.11.000 per year
Minimum and maximum purchase price for different types of annuities:
The total purchase price under all policies under this plan allowed for a senior citizen shall not exceed Rs 15 lakhs.
For the 2022-23 financial year, the plan provides for a guaranteed annuity of 7.40% per annum, payable monthly.
The policy can be accessed offline or via the LIC official website.
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