The Life Insurance Corporation of India (LIC), on May 26, introduced the modified Pradhan Mantri Vaya Vandana Yojana (PMVVY) Scheme for senior citizens. After this modification, according to the LIC website, the scheme will earn an assured rate of return of 7.4 per cent per annum which will be payable monthly for the entire duration of 10 years. The scheme is open from May 26 up till March 31, 2023, that is, for three financial years.
This modification of the scheme comes a few days after the Cabinet approved its extension up to March 31, 2023.
Here is all you need to know about the PMVVY pension scheme.
How to invest: This scheme is offered only by LIC for senior citizens (age 60 years and above). Those who want to invest in the scheme can do so online via the LIC website Licindia.in. You can also purchase the scheme offline by visiting the nearest LIC office.
Pension payout: PMVVY gives a guaranteed payout of pension at a specified rate for 10 years. It also offers a death benefit in the form of return of purchase price to the nominee.
If the pensioner lives through the policy term, that is, till 10 years, then he/she will get the purchase price and the final pension installment. However, on the death of the pensioner during the policy-term, the purchase price is refunded and is payable to the nominee or the legal heirs.
The scheme can be purchased by investing a lump sum in PMVVY pension scheme in the following manner, according to which the senior citizens will get the pension income.
Minimum purchase price under different modes of pension
|Mode of Pension||Minimum Purchase Price||Corresponding Pension Amount|
|Yearly||1,56,658||12,000 per annum|
|Half-Yearly||1,59,574||6,000 Half year|
|Quarterly||1,61,074||3,000 per Qtr.|
|Monthly||1,62,162||1,000 per month|
Source: LIC webiste
Maximum purchase price under different modes of pension
|Mode of Pension||Maximum Purchase Price(Rs)||Corresponding Pension Amount|
|Yearly||14,49,086||1,11,000 per annum|
|Half-Yearly||14,76,064||55,500 per half year|
|Quarterly||14,89,933||27,750 per Qtr.|
|Monthly||15,00,000||9,250 per month|
Source: LIC Website
Note: Once any of the option is chosen, it cannot be altered later.
Mode of pension payment: The modes of pension payment are monthly, quarterly, half-yearly and yearly. The pension payment is processed through NEFT or Aadhaar Enabled Payment System. So, depending on the mode of pension payment, that is, monthly, quarterly, half-yearly or yearly, the first instalment of pension will be paid after a month, three months, six months, or a year from the date of purchase of the scheme, respectively.
Other features of the scheme
Medical: No medical examination is required.
Surrender Value: Premature exit is allowed during policy term under exceptional circumstances like critical illness of self or spouse. Surrender value payable in such cases is 98 per cent of the purchase price.
Loan: Loan is available under the policy after completion of 3 policy years. Maximum loan granted will be 75 per cent of the purchase price.