Government has launched the Pradhan Mantri Vaya Vandana Yojana (PMVVY) to provide social security during old age and to protect elderly persons aged 60 and above against a future fall in their interest income due to uncertain market conditions.
Salient features of Pradhan Mantri Vaya Vandana Yojana
- The scheme provides an assured return of 8% per annum for 10 years
- The differential return, i.e. the difference between return generated by LIC and the assured return of 8% per annum would be borne by Government of India as subsidy on an annual basis.
- Pension is payable at the end of each period during the policy tenure of 10 years as per the frequency of monthly/quarterly/ half-yearly/yearly as chosen by the subscriber at the time of purchase.
- Minimum purchase price under the scheme is Rs.1,50,000/- for a minimum pension of Rs. 1,000/- per month
- The maximum purchase price is Rs.15,00,000/- for a maximum pension of Rs.5,000/- per month.
- The scheme is exempted from Goods and Services Tax (GST).
- The scheme is open for subscription till 3rd May 2018.
- Life Insurance Corporation operates the scheme.
- The scheme allows premature exit during the policy term under exceptional circumstances like the Pensioner requiring money for the treatment of any critical/terminal illness of self or spouse. The Surrender Value payable in such cases shall be 98% of Purchase Price
- Loan facility is available after completion of 3 policy years. The maximum loan that can be granted shall be 75% of the Purchase Price.
In budget 2018-19, the government has increased the maximum investment limit from Rs 7.5 lacs to Rs 15 lacs.
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