Life Insurance Corporation of India (LIC) has launched Pradhan Mantri Vaya Vandana Yojana (PMVVY). The Pradhan Mantri Vaya Vandana Yojana pension scheme is non-linked and non-participating subsidized by the center for senior citizens aged 60 years and above.

The PMVYY pension scheme was recently modified by the finance ministry. The pension scheme was then extended till 31 March, 2023 with an assured interest rate of 7.40 per cent per annum for FY 2020-21. The pension scheme offers a guaranteed monthly income of up to Rs 10,000 for 10 years, according to LIC.

India’s largest insurer LIC in its release said, “For the policies sold during the next 2 financial years, the applicable assured rate of interest, at which the pension payment shall be made, will be reviewed and decided at the beginning of each financial year by the finance ministry.”

Here are the features and benefits of this scheme:

  • This scheme can be purchased offline as well as online from LIC.
  • In FY2020-2021, the scheme will provide an assured rate of return of 7.40 per cent per annum. Hence, if an investor invests this financial year, he/she will fetch 7.40 per cent per annum payable monthly for the duration of 10 years.
  • Individuals of 60 years and above can invest in this scheme and get the benefit if guaranteed monthly income.
  • From the option of monthly, quarterly, half-yearly, or yearly mode of pension the pensioner can choose according to their need.
  • Depending on the amount invested in the scheme, senior citizens will be able to withdraw a minimum pension of Rs 1,000 per month.
  • However, note that the maximum pension an investor can get under this scheme is Rs 9,250 per month.
  • The minimum purchase price for this scheme is set at:

i) Rs 1,62,162 – for monthly mode

ii) Rs 1,61,074 – for quarterly pension

iii) Rs 1,59,574 – for half-yearly mode

iv) Rs 1,56,658 for yearly mode

  • The maximum pension one can get under this scheme will be:

i) Rs 9,250 per month,

ii) Rs 27,750 per quarter,

iii) Rs 55,500 half-yearly

iv) Rs 1,11,000 on annual pay-out basis

Other benefits of the PMVYY pension scheme

On survival of the Pensioner for the whole policy term of 10 years, pension in arrears will be payable. During the policy term of 10 years if the pensioner dies, as the death benefit, the purchase price will be refunded to the beneficiary. As maturity benefit, if the pensioner survives till the end of the policy term of 10 years, final pension installment along with purchase price will be paid.