Pradhan Mantri Vaya Vandana Yojana, Features, Eligibility

Pradhan Mantri Vaya Vandana Yojana

The government introduced the Pradhan Mantri Vaya Vandana Yojana on May 4, 2017. This is a government pension programme designed to give senior persons social security and to shield them from a potential decline in interest income owing to bad market conditions. Senior adults 60 years of age or older may apply for this pension plan before March 31, 2020.

Pradhan Mantri Vaya Vandana Yojana Overview

The table below discusses some of the Pradhan Mantri Vaya Vandana Yojana’s highlights:

Benefits of Pradhan Mantri Vaya Vandana Yojana

Life Insurance Corporation (LIC) manages and administers the government pension programme for senior citizens known as Pradhan Mantri Vaya Vandana Yojana (PMVVY). Following are some of the program’s key advantages:

• The plan offers a monthly payment of 8% p.a. guaranteed return and is GST/service tax exempt.
• After three policy years, the programme grants loans up to 75% of the purchase price.
• The plan also permits early exit for the treatment of any serious or terminal sickness in oneself or one’s spouse. 98% of the Purchase Price will be returned in the event of such an early departure.
• The nominee or beneficiary may use the benefits of the plan if the pensioner passes away within the 10-year policy period.
• The pensioner, his or her spouse, and any dependents are all generally eligible for the program’s benefits.

Eligibility of Pradhan Mantri Vaya Vandana Yojana

Any person must meet the following requirements in order to be eligible for the Pradhan Mantri Vaya Vandana Yojana:

• He or she must be 60 years of age or older to be eligible for the programme.
• The duration of the policy should be ten years.
• The maximum investment per senior citizen should be Rs. 15 lakh.
• The monthly pension should not be less than Rs. 1,000 and never more than Rs. 10,000.

Role of Government in Pradhan Mantri Vaya Vandana Yojana

• The amount of the Government’s financial liability is capped at the difference between the LIC’s market return and the guaranteed rate of return (7.4% for 2020–2021).
• On the guaranteed rate of return, the pension is calculated.
• This shields seniors (60 years of age and older) from a potential decline in interest income due to unsure market circumstances.

Key Points of Pradhan Mantri Vaya Vandana Yojana

• The amount of the Government’s financial liability is capped at the difference between the LIC’s market return and the guaranteed rate of return (7.4% for 2020–2021).
• On the guaranteed rate of return, the pension is calculated.
• This shields seniors (60 years of age and older) from a potential decline in interest income due to unsure market circumstances.

Important Government Schemes

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