Launched by our Prime Minister and operated by the Government of India, Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a scheme related to pension and exclusively for senior citizens (over 60 years). The scheme is valid from May 4, 2017, to March 31, 2020.
The scheme has been launched against a decrease in the future interest income of senior citizens owing to uncertain market situations. Moreover, the aim of PMVVY is to proffer social security to senior citizens.
Implemented by the Life Insurance Corporation of India, this sarkari yojana provides an assured return of 8% per annum for 10 years. According to an option selected by a pensioner while purchasing, a pension is payable monthly/quarterly/half-yearly/yearly. After 3 years into the scheme, a loan of up to 75% of the purchase price is allowed to pensioners.
Of note, at the end of 10 years, a pensioner is applicable for purchase price with final pension installment. In case of the death of a pensioner, the purchase price is paid to the beneficiary.
People who are 60 years old or more can apply for the scheme. The scheme ensures the investment limit of Rs. 15 lac per senior citizen.
Pension is payable in two types, namely, minimum pension and maximum pension. The minimum pension is paid as Rs. 1,000/month; Rs. 3,000/quarter; Rs. 6,000/half year; or Rs. 12,000/year. The maximum pension is paid as Rs. 10,000/month; Rs. 30,000/quarter; Rs. 60,000/half year; or Rs. 120,000/year. The scheme is purchasable by paying a lump-sum purchase price, which varies in terms of minimum and maximum purchase price range.
This yojana allows a pensioner to prematurely exit the policy under certain circumstances. In such cases, a surrender value has to be paid, which is 98% of the purchase price.
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