On May 26, 2020 Life Insurance Corporation of India(LIC) announced the launch of the Pradhan Mantri Vaya Vandana Yojana-PMVVY (Modified- 2020) Scheme for those over and above 60 years. The sale will be available from May 26 for 3 financial years(up to March 31, 2023). This scheme can be purchased offline as well as online from LIC website.
Key Points
i.The Union Cabinet has recently extended the pension plan till 31 March 2023 which is a social security scheme for senior citizens.
ii.LIC is solely authorised to operate this scheme that offers a total payout not exceeding Rs 15 lakhs. The scheme is a Non-Linked, Non-Participating, Pension Scheme subsidised by the Centre.
Major Highlights of the scheme
i.Tenure & interest rate
- The policy has a 10-year tenure and for policies sold in the 1st financial year March 2021, the scheme will offer an assured rate of return of 7.40% per annum(p.a), but will be paid monthly for the entire 10 year period.
- For policies sold over the next two fiscal years, the applicable assured interest rate will be reviewed and decided by the government at the beginning of each financial year.
ii.Senior citizens can draw a minimum pension of Rs 1,000 per month(p.m) depending on the amount invested in the scheme. The maximum pension amount is limited at Rs 10,000 p.m
iii.Mode of pensionÂ
The scheme can be purchased with a total purchase price & the pensioner has the option to choose either the amount of pension or the purchase price. At the time of purchasing the plan, the pensioner can choose the monthly / quarterly / half yearly or annual mode of pension.
- Minimum Investment: The minimum investment has also been revised to ₹1,56,658 for pension of ₹12,000 per annum.
- Minimum purchase price: For Monthly mode- Rs1,62,162; For quarterly mode- Rs 1,61,074; For half-yearly mode- Rs 1,59,574;Â For yearly mode- Rs 1,56,658
- Maximum pension: In monthly mode – Rs 9,250;Â In quarterly mode-Rs. 27,750;Â In half-yearly mode- Rs 55,500; In yearly mode- Rs. 1,11,000
iv.BenefitsÂ
- Pension Payment– In case the pensioner survives during the policy term, pension in arrears (at the end of each period as per mode chosen) shall be payable.Â
- Death Benefit– In case of death of the pensioner during the policy-term, the purchase price shall be refunded to the nominee/legal heirs.
- Maturity Benefit– In case if the pensioner survives through the policy term of 10 years the purchase price & the last pension payout shall be given.
v.Loan- After 3 policy years, the policy allows loan up to 75% of purchase price.
vi.Surrender Value– There is a provision of premature(early) exit for treatment of any critical/terminal illness of self or spouse. In this case, the surrender value payable shall be 98% of the purchase price.
About LIC:
Corporate Office– Mumbai, Maharashtra
Chairman–Â M R Kumar
