The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a government-supported pension policy for senior citizens. This PMVVY plan is provided by the Life Insurance Corporation (LIC) of India for post-retirement financial planning. The plan offers 7.40 per cent annual interest on investments under the policy and is available to those over 60. The plan provides a monthly pension for a maximum of 10 years, allowing senior citizens to live a peaceful retirement life.

Here are the key features of the Pradhan Mantri Vaya Vandana Yojana (PMVVY):

Returns

The scheme offers an assured return of 7.40 per cent per annum, which is reset annually. Starting April 1, the interest rate is adjusted in line with the Senior Citizens Saving Scheme (SCSS) rates. The scheme is revised if the rates breach the 7.75 per cent threshold.

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Periodic Payout

The policyholder can receive the pension in monthly, quarterly, half-yearly and yearly modes till the policy ends. For instance, if the policyholder opts for the quarterly payment mode, the pension amount will be credited to their bank accounts every three months.

Maturity Benefit

The Pradhan Mantri Vaya Vandana Yojna provides maturity benefits. For example, the policyholder will receive the purchase price in a lump sum at the end of the policy term.

Death Benefits

If a pensioner passes away before the policy term, the beneficiary will be eligible to collect the full purchase price upon filing the necessary paperwork.

Surrender Value

If the pensioner wants to close the account before the policy term, subject to conditions like worsening health conditions due to terminal or life-altering diseases and the need for cash for treatment, a 2 per cent penalty will be levied on the total corpus, and the rest will be returned.

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Free Lock-In Period

The Pradhan Mantri Vaya Vandana Yojna provides a free lock-in period of 15 days, during which the policyholder can unsubscribe from the scheme without penalty. The full purchasing value will be returned to the policyholder.

Pension Amount

LIC PMVVY subscribers can earn a minimum monthly pension of Rs 1,000 to a maximum of Rs 1.1 lakh per month, depending on the purchasing price.