Pradhan Mantri Vaya Vandana Yojana (PMVVY)

 The Union Cabinet has given its approval to the Extension of Pradhan Mantri Vaya Vandana Yojana (PMVVY) and other changes for the welfare of and to enable old age income security for Senior Citizens.

Changes for the Welfare of the aged:

1. Extension of Pradhan Mantri Vaya Vandana Yojana (PMVVY) up to 31st March, 2023.
2. Revised rate of returns of Senior Citizens Saving Scheme (SCSS).
3. Approval for expenditure to be incurred on account of the difference between the market rate of return generated by LIC.
4. The minimum investment has also been revised to Rs.1,56,658 for pension of Rs.12,000/- per annum and Rs.1,62,162/- for getting a minimum pension amount of Rs.1000/- per month under the scheme.

About PMVVY:

It is a Pension Scheme exclusively for the senior citizens aged 60 years and above.

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.

Maximum investment: One can invest a maximum amount of ₹15 lakh under Pradhan Mantri Vaya Vandana Yojana (PMVVY) scheme. The tenure of the policy is set at 10 years.

Key features of the scheme:

• Scheme provides initially an assured rate of return of 7.40 % per annum for the year 2020-21 per annum and thereafter to be reset every year.
• 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 GST.
• On survival of the pensioner to the end of the policy term of 10 years, Purchase price along with final pension installment shall be payable.
• Loan upto 75% of Purchase Price shall be allowed after 3 policy years (to meet the liquidity needs). Loan interest shall be recovered from the pension installments and loan to be recovered from claim proceeds.
• The scheme also allows for 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 death of the pensioner during the policy term of 10 years, the Purchase Price shall be paid to the beneficiary.