Savings schemes are run by the government for people of almost every age group. One such scheme is the Pradhan Mantri Vaya Vandana Yojana (PMVVY), which fulfills the shortfall of Rs. It is a futuristic scheme, which is currently providing assured pension at the rate of 7.40 per cent per annum payable monthly over 10 years.
The age of the people investing in this scheme should be at least 60 years. People below this age group are not eligible for investment. The upper limit for investing in this scheme is Rs 15 lakh for 10 years. In this scheme the pension is paid during a fixed time interval. For example, pension payments are made on monthly, quarterly, half-yearly and annual basis. The beneficiary can get a pension between Rs 1,000 to Rs 9,250 per month depending on the amount invested.
This scheme is operated under Life Insurance Corporation of India. This plan can be bought offline as well as online. As per the information given on LIC, this assured rate of pension of 7.40 percent monthly for the financial year 2021-22 on this pension policy will be payable for the entire policy term of 10 years.
The guaranteed rates of pension for policies sold during a year are reviewed and decided by the Ministry of Finance, Government of India at the beginning of each year. The rate to be decided during the financial year remains the same for the entire policy term of 10 years. Presently most of the major banks are offering an interest rate of around 6.5 per cent on their fixed deposit schemes for tenors up to 10 years.
Features of the plan
The plan can be purchased by paying a lump sum purchase price. The pensioner has the option to choose either the pension amount or the purchase price. On survival of the pensioner during the policy term of 10 years, arrears of pension will be payable (at the end of each term as per the method chosen); Whereas in case of death of the pensioner during the policy term of 10 years, the purchase price will be returned to the beneficiary, as per the plan document. Whereas on survival of the pensioner till the end of the policy term of 10 years, the purchase price along with the last pension installment will be payable.
how much loan
The plan allows premature exit during the policy term in exceptional circumstances such as the pensioner needs money for the treatment of any critical/incurable illness of himself or the spouse. In such cases 98 per cent of the purchase price will be payable. Loan facility is also available after completion of three policy years. The maximum loan that can be given would be 75 per cent of the purchase price.