- The Central Government has given its approval for extending the investment limit from Rs 7.5 lakhs to Rs 15 lakhs under the Pradhan Mantri Vaya Vandana Yojana (PMVVY).
- The Union Cabinet on May 2, 2018 also approved the extension of time limits for subscription from May 4, 2018 to March 31,2020 under the PMVVY.
- These decisions were taken as part of Government’s commitment for financial inclusion and social security.
- Further, as a boost to the Social Security initiatives for senior citizens, the investment limit of Rs 7.5 lakh per family in the existing scheme is enhanced to Rs 15 lakh per senior citizen in the modified PMVVY, thereby providing a larger social security cover to the Senior citizens. It will enable upto Rs.10000 Pension per month for Senior Citizens.
- As of March, 2018, a total number of 2.23 lakh senior citizens are being benefited under PMVVY. In the previous scheme of Varishtha Pension Bima Yojana-2014, a total number of 3.11 lakh senior citizens are being benefited.
About Pradhan Mantri Vaya Vandana Yojana (PMVVY)
- The Finance Minister had formally launched the Pradhan Mantri Vaya Vandana Yojana (PMVVY) on July 21, 2017 in the national capital.
- The PMVVY is being implemented through Life Insurance Corporation of India (LIC) 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.
- 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.
- 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.
- Pension is payable at the end of each period, during the policy term of 10 years, as per the frequency of monthly/ quarterly/ half-yearly/ yearly as chosen by the pensioner at the time of purchase.
- The scheme is exempted from Service Tax/ GST.
- On survival of the pensioner to the end of the policy term of 10 years, Purchase price along with final pension installment shall be payable.
- Loan upto 75% of Purchase Price shall be allowed after 3 policy years (to meet the liquidity needs). Loan interest shall be recovered from the pension installments and loan to be recovered from claim proceeds.
- The scheme also allows for premature exit for the treatment of any critical/ terminal illness of self or spouse. On such premature exit, 98% of the Purchase Price shall be refunded.
- On death of the pensioner during the policy term of 10 years, the Purchase Price shall be paid to the beneficiary.
