Pradhan mantra Vaya Vandana Yojna is basically introduced for senior citizen of age 60 and above. It is more of a pension plan which was launched by the Indian government on 4th May 2017. Under this scheme, senior citizens will get a guaranteed return of 8% for 10 years. This policy can be purchased online as well as offline.
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. The 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. The minimum purchase price under the scheme is Rs.1,50,000/- for a minimum pension of Rs. 1,000/- per month and the maximum purchase price is Rs.7,50,000/- 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.
If a policyholder is not satisfied with the “Terms and Conditions” of the policy, he/she may return the policy to the Corporation within 15 days (30 days if this policy is purchased online) from the date of receipt of the policy stating the reason of objections.
The amount to be refunded within free look period shall be the Purchase Price deposited by the policyholder after deducting the charges for Stamp duty and pension paid if any.
Benefits of Pradhan Mantri Vaya Vandana Yojana
- 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.
Eligibility criteria for PMVVY
- Minimum Entry Age: 60 years (completed)
- Maximum Entry Age: No limit
- Policy Term: 10 years
- Investment limit: Rs 15 lakh per senior citizen
- Minimum Pension: Rs. 1,000/- per month
Rs. 3,000/- per quarter
Rs.6,000/- per half-year
Rs.12,000/- per year
- Maximum Pension: Rs. 10,000/- per month
Rs. 30,000/- per quarter
Rs. 60,000/- per half-year
Rs. 1,20,000/- per year