Goverment of India has annouced to increase the investment limit in Pradhan Mantri Vaya Vandan Yojna (PMVVY). This scheme is for senior citizen age 60 years and above. As interest rate are falling, it is difficult for senior citizens to survive on interest income. LIC has announced to launch PMVVY on 04/05/2018 with new benefits.
Here we can look the details and benefits of PMVVY:
1) Minimum entry age: 60 years
2) Maximum entry age: no limit
3) Policy term: 10 years
4) Maximum investment amount: Rs. 15,00,000
5) Minimum pension: Rs. 1000/- per month, 3000/- per qarter, Rs. 6000/- half-yearly, Rs. 12000/- yearly
6) Maximum Pension: Rs. 5,000/- per month,Rs. 15,000/- per quarter,Rs. 30,000/- per half-year,Rs. 60,000/- per year
7) The limit of maximum investment is per senior citizen.
8) There is no levy of GST on this scheme.
9) The modes of pension payment are monthly, quarterly, half-yearly & yearly. The pension payment shall be through NEFT or Aadhaar Enabled Payment System. The first instalment of pension shall be paid after 1 year, 6 months, 3 months or 1 month from the date of purchase of the same depending on the mode of pension payment i.e. yearly, half-yearly, quarterly or monthly respectively.
10) The scheme allows premature exit during the policy term under exceptional circumstances like the Pensioner requiring money for the treatment of any critical/terminal illness of self or spouse. The Surrender Value payable in such cases shall be 98% of Purchase Price.
11) Loan facility is available after completion of 3 policy years. The maximum loan that can be granted shall be 75% of the Purchase Price.
12) Fund will lock for 10 years in this scheme.
13) If a policyholder is not satisfied with the “Terms and Conditions” of the policy, he/she may return the policy to the Corporation within 15 days (30 days if this policy is purchased online) from the date of receipt of the policy stating the reason of objections. The amount to be refunded within free look period shall be the Purchase Price deposited by the policyholder after deducting the charges for Stamp duty and pension paid, if any.
PMVVY is a product for those senior citizons who need regular income. If senior citizen does not want regular income or who is financially strong, he/she can look hybrid mutual funds or equity and debt fund catagory.
Note: This product note is for knowledge purpose only. This is not any recommendations or advise to invest in this product.