New Delhi: The government on Friday launched a pension scheme for senior citizens that promises an assured return of 8 per cent. Finance Minister Arun Jaitley launched the Pradhan Mantri Vaya Vandana Yojana (PMVVY), which was announced in the 2017-18 Union Budget.
Here is all you need to know about the scheme:
• The scheme is open to people aged 60 years and above.
• It can be purchased offline as well as online through the state-run Life Insurance Corporation (LIC) of India, which has been given the mandate to operate the scheme.
• The plan provides an annual assured return of 8 per cent payable monthly (equivalent to an annual effective rate of 8.30 per cent) for 10 years.
• During the policy term of 10 years, the pension will be payable at the end of each period, depending on the frequency — monthly, quarterly, half-yearly, or yearly — chosen by the pensioner at the time of the purchase.
• If the pensioner lives to the end of the policy term of 10 years, the purchase price, along with the final pension instalment, will be paid.
• One can avail of a loan up to 75% of the purchase price after 3 years of the policy. Interest on the loan will be recovered from the pension instalments, and the loan from the claim proceeds.
— Ministry of Finance (@FinMinIndia) July 21, 2017
• The scheme allows for premature exit for the treatment of any critical, terminal illness of the pensioner or spouse. On such premature exit, 98% of the purchase price will be refunded.
• On death of the pensioner during the policy term, the purchase price shall be paid to the beneficiary. The ceiling for maximum pension is for a family as a whole, with the family comprising the pensioner, his or her spouse, and dependants.
• The scheme is exempt from the Goods & Services Tax (GST).