In a relief to senior citizens, Prime Minister Narendra Modi has doubled the investment limit under the government’s Pradhan Mantri Vaya Vandan Yojana (PMVVY).
Here is everything senior citizens need to know about the revised Pradhan Mantri Vaya Vandan Yojana (PMVVY) scheme:
1. The Cabinet on Thursday (May 2) approved doubling of investment limit in the senior citizen pension scheme from previous Rs. 7.5 lakh to Rs. 15 lakh.
2. The limit of subscription has also been extended by almost two years – from May 4, 2018 to Mar 31, 2020.
3. This will now help senior citizens to get a monthly pension of up to Rs. 10,000.
4. State-owned Life Insurance Corporation of India (LIC) is implementing the PMVVY with an aim to provide social security during old age and protect elderly persons aged 60 years and above against a future fall in their interest income due to uncertain market conditions.
5. The scheme provides an assured pension based on a guaranteed rate of return of 8% per annum for ten years, with an option to opt for pension on a monthly / quarterly / half yearly and annual basis.
6. The differential return, i.e. the difference between the return generated by LIC and the assured return of 8% per annum would be borne by Government of India as subsidy on an annual basis.
7. The PMVVY can be purchased offline as well as online through LIC.
8. When the policy term of 10 years ends, the pensioner gets back the purchase price (amount invested to earn pension) along with final pension instalment.
9. In case of death of the pensioner during the policy term of 10 years, the beneficiary will be paid the purchase price.
10. In case of liquidity needs, the pensioner can get a loan up to 75% of the purchase price after three policy years.
11. In case of premature exit for treatment of any critical or terminal illness of self or spouse, the scheme holder will be refunded 98% of the purchase price.
12. According to the government, till March 2018, as many as 2.23 lakh senior citizens benefited under the PMVVY. Pertinently, the previous scheme – Varishtha Pension Bima Yojana of 2014, benefited 3.11 lakh senior citizens.
Sreya is based in Kolkata. She is a Senior Editor of Big Wire.