Pradhan Mantri Vaya Vandana Yojana (PMVVY)

Finance Minister Arun Jaitley has formally launched the Pradhan Mantri Vaya Vandana Yojana (PMVVY), or a pension scheme, for senior citizens on 21st July 2017. Speaking after the launch of PMVVY, Mr Jaitley said that settlement ratio of LIC (Life Insurance Corporation of India) is near to the maximum. Prime Minister Narendra Modi had earlier announced the launch of the scheme exclusively for the senior citizens aged 60 years and above.

Pradhan Mantri Vaya Vandana Yojana (PMVVY): 

• LIC started offering the scheme from May 4, 2017.
• Under this scheme, senior citizens (60 years and above) in which they will get a guaranteed interest of 8% for 10 years. The scheme will remain open till May 3, 2018.
• The scheme is exempted from GST or goods and services tax. LIC has sold 58,152 PMVVY schemes garnering Rs. 2,705 crore since its soft launch on May 4.
• The shortfall owing to the difference between the interest guaranteed and the actual interest earned and the expenses relating to administration shall be subsidised by the government of India and reimbursed to the LIC.
• PMVVY can be purchased offline as well as online through Life Insurance Corporation (LIC) of India which has been given the sole privilege to operate this scheme.
• The 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.
• On survival of the pensioner to the end of the policy term of 10 years, purchase price along with final pension instalment shall be payable.
• The scheme also allows for premature exit for the treatment of any critical/ terminal illness of self or spouse. On such premature exit, 98 per cent 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.