Finance Minister Arun Jaitley formally launched the Pradhan Mantri Vaya Vandana Yojana.
Pradhan Mantri Vaya Vandana Yojana – PMVVY is a Pension Scheme announced by the Government of India exclusively for the senior citizens aged 60 years and above which is available from 4th May 2017 to 3rd May 2018.
The Scheme can be purchased offline as well as online through Life Insurance Corporation (LIC) of India which has been given the sole privilege to operate this Scheme.
Benefits under PMVVY
- The scheme provides an assured return of 8% p.a. payable monthly (equivalent to 8.30% p.a. effective) for 10 years.
- The pension is payable at the end of each period, during the policy term of 10 years, as per the frequency of monthly/ quarterly/ half-yearly/ yearly as chosen by the pensioner at the time of purchase.
- The scheme is exempted from Service Tax/ GST.
- On survival of the pensioner to the end of the policy term of 10 years, Purchase price along with final pension instalment shall be payable.
- Loan up to 75% of Purchase Price shall be allowed after 3 policy years (to meet the liquidity needs). Loan interest shall be recovered from the pension instalments and loan to be recovered from claim proceeds.
- The scheme also allows for the premature exit for the treatment of any critical/ terminal illness of self or spouse. On such premature exit, 98% of the Purchase Price shall be refunded.
- On the death of the pensioner during the policy term of 10 years, the Purchase Price shall be paid to the beneficiary.
- The ceiling of maximum pension is for a family as a whole, the family will comprise of the pensioner, his/her spouse and dependents.
- The shortfall owing to the difference between the interest guaranteed and the actual interest earned and the expenses relating to administration shall be subsidized by the Government of India and reimbursed to the Corporation.