Government of India in the Budget Speech of 2018-19 has announced the enhancement of maximum limit under Pradhan Mantri Vaya Vandana Yojana to Rs. 15 lakhs per senior citizen. The period of sale for this scheme has also been extended upto 31st March, 2020. LIC of India has been given the sole privilege to operate this scheme.
Eligibility of PMVVY
Given below are the eligibility criteria that individuals must meet in order to be eligible for the PMVVY scheme:
- Minimum age of entry: The individual must be 60 years or higher.
- Maximum age of entry: There is no limit.
- Duration of the policy: The tenure of the policy is 10 years.
- Minimum pension that is earned: The minimum pension for a month, quarter, half-yearly, and yearly are Rs.1,000, Rs.3,000, Rs.6,000, and Rs.12,000, respectively.
- Maximum pension that can be earned: Rs.10,000, Rs.30,000, Rs.60,000, and Rs.1,20,000 is the maximum pension that can be earned for a month, quarter, half-yearly, and yearly, respectively.
Benefits of PMVVY scheme
Mentioned below are the benefits of the PMVVY scheme:
- Under the scheme, the pensioner will receive an assured return of 8% p.a. for the policy duration of 10 years.
- Pension Payment: In case the pensioner survives the duration of the policy, the pension will be paid in arrears. The pensioner can also choose the mode by which the pension must be made.
- Death benefit: The purchase price will be paid back to the beneficiary if the pensioner passes away during the policy tenure.
- Maturity benefit: If the pensioner survives the entire policy tenure, the purchase price will be paid along with the final pension instalment.
- Loan facility: After completing 3 years of the policy, the pensioner can avail loans against the policy. A maximum of 75% of the purchase price can be availed as a loan. The interest on the loan will be recovered from the pension payment that is being made. In case any loan has been sanctioned up to 30 April 2018, the rate of interest is 10% p.a. and it is payable half-yearly throughout the entire policy term.
- Free-look period: The policyholder can surrender the policy within 15 days if he/she is not happy with the terms of the policy. However, the free-look period is 30 days if the policy is bought online. The purchase price after the deduction of stamp charges will be refunded to the policyholder.
Purchase Price payment
Individuals can buy the scheme by paying the purchase price in a lump sum. The pensioner can either choose the purchase price amount or the pension amount he/she will receive. Under the different modes, the minimum and maximum pension prices are mentioned in the table below:
|Pension mode||Minimum Purchase Price (Rs.)||Maximum Purchase Price (Rs.)|
The Purchase Price will be rounded to the nearest rupee when it is being charged.
Pension payment modes
Monthly, quarterly, half-yearly, and annual modes are the different modes of payment that are available. The payment of pension must be done via Aadhaar Enabled Payment System or National Electronics Fund Transfer (NEFT).
Depending on the mode of payment, the first transfer must be done within 1 month, 3 months, 6 months, or 1 year from the date the policy was bought.