The Government of India extended the Pradhan Mantri Vaya Vandana Yojana scheme recently, which offers a modified rate to pensioners aged 60 years and above. Subsidised by Indian government, Pradhan Mantri Vaya Vandana Yojana (Modified- 2020) is a Non-Linked, Non-Participating pension scheme.
What you should know about the scheme:
- Pensioners can buy the scheme from today (May 26, 2020) and will be available for three financial years up to March 31, 2023.
- The scheme can be purchased offline as well as online from LIC of India.
- The policy term is 10 years.
- The purchase price of the policy allowed to a senior citizen shall not exceed Rs 15 lakh.
- The policyholder who has purchased the scheme in the first financial year, March 31, 2021, the scheme will provide an assured rate of return of 7.40 per cent p.a. payable monthly (i.e. equivalent to 7.66 per cent p.a.) for the entire duration of 10 years.
- One has to keep in mind the fact that if the policy is purchased in the next two financial years, the applicable assured rate of interest, may or may not be the same. It will be subjected to review of the Ministry of Finance, Government of India. But the decision will be taken at the beginning of each financial year.
- The scheme can be purchased by payment of a lump-sum purchase price. The pensioner has an option to choose either the amount of pension or the purchase price. At the time of purchase, the pensioner can choose monthly/quarterly/half yearly or yearly mode of pension. However, the minimum purchase price for monthly mode is Rs 1,62,162 and maximum pension for this scheme will be Rs 9,250 per month.
- Loan up to 75 per cent of purchase price is allowed after three policy years.
- The scheme also allows for premature exit for treatment of any critical/terminal illness of self or spouse. The surrender value payable in such cases shall be 98 per cent of the purchase price.
- On death of the policyholder during the policy term, the purchase price shall be refunded to the nominee/legal heirs. On survival of the pensioner to the end of the policy term, purchase price and the final pension instalment shall be payable.