PRADHAN MANTRI VAYA VANDANA YOJANA (PMVVY)

Objectives

To provide social security during old age and protect elderly persons against a future fall in their interest income due to uncertain market conditions.

Beneficiaries: Elderly persons aged 60 years and above

Salient features

  • It will provide an assured pension based on a guaranteed rate of return of 8 per cent for 10 years, with an option to opt for pension on a monthly / quarterly / half yearly and annual basis.
  • Union cabinet approved extending the investment limit from Rs 7.5 lakhs to Rs 15 lakhs as well as extension of time limits for subscription from 4th May 2018 to 31st March, 2020.
  • It will be implemented through Life Insurance Corporation of India (LIC).
  • The difference between the return generated by LIC and the guaranteed 8 percent interest would be compensated through the subsidy given to LIC.
  • The scheme also allows for premature exit only for the treatment of any critical/ terminal illness of self or spouse.
  • On death of the Pensioner during the policy term of 10 years, the Purchase Price shall be refunded to beneficiary.
  • Loan facility is available after completion of 3 policy years. The maximum loan that can be granted shall be 758 of the purchases Price.
  • No Tax benefits are available.

Liquidity, no income tax benefit, upper age limit are its some of the problems that needs to be taken care of.

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