modified PM Vyay Vandana Yojana

Modified PM Vaya Vandana Yojana

This plan will be available for sale commencing from May 26 for 3 financial years – up to March 31, 2023.

Modified PM Vaya Vandana Yojana

Source | The Hindu Businessline


GS Paper II: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.



modified PM Vyay Vandana Yojana

Key Takeaways

  • This plan will be available for sale commencing from May 26 for 3 financial yearsup to March 31, 2023.
  • LIC is solely authorised to operate this scheme, which works as a Non-Linked, Non-Participating, Pension Scheme subsidised by the Centre.

Read More: Pradhan Mantri Vaya Vandana Yojana (PMVVY)


What you need to know about modified PM Vaya Vandana Yojana (Modified-2020) Scheme?

Life Insurance Corporation of India (LIC) announced the launch of the Pradhan Mantri Vaya Vandana Yojana (Modified- 2020) Scheme. This plan will be available for sale commencing from May 26 for 3 financial yearsup to March 31, 2023.

  • This scheme can be purchased offline as well as online from LIC of India.
  • The Union Cabinet had earlier this month extended the PMVVY or Pradhan Mantri Vaya Vandana Yojana, which is a social security scheme for senior citizens.
  • LIC is solely authorised to operate this scheme, which works as a Non-Linked, Non-Participating, Pension Scheme subsidised by the Centre.
  • The policy term is of 10 years and for policies sold during the first financial year — up to March 31, 2021, the scheme will provide an assured rate of return of 7.40 per cent per annum payable monthly (which is equivalent to 7.66 per cent per annum) for the entire duration of 10 years.

Read More: Rajiv Gandhi Kisan Nyay Yojana



Benefits Under the Scheme

  • Initially the scheme will provide an assured rate of return of 7.40 % per annum for the year 2020-21 per annum and thereafter to be reset every year.
  • 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.
  • The scheme is exempted from GST.
  • On survival of the pensioner to the end of the policy term of 10 years, purchase price along with final pension installment shall be payable.
  • Loan upto 75% of Purchase Price shall be allowed after 3 policy years (to meet the liquidity needs).
  • Loan interest shall be recovered from the pension installments and loan to be recovered from claim proceeds.
  • The scheme also allows for premature exit for the treatment of any critical/ terminal illness of self or spouse. On such premature exit, 98% 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.
  • The ceiling of maximum pension is for a family as a whole, the family will comprise of pensioner, his/her spouse and dependants.
  • The shortfall owing to the difference between the interest guaranteed and the actual interest earned and the expenses relating to administration shall be subsidized by the Government of India and reimbursed to the Corporation.

Eligibility under the Scheme

  1. Minimum Entry Age: 60 years (completed)
  2. Maximum Entry Age: No limit
  3. Policy Term : 10 years
  4. Investment limit : Rs 15 lakh per senior citizen
  5. Minimum Pension: Rs. 1,000/- per month
    • Rs. 3,000/- per quarter
    • Rs.6,000/- per half-year
    • Rs.12,000/- per year.
  6. Maximum Pension: Rs. 12,000/- per month
    • Rs. 30,000/- per quarter
    • Rs. 60,000/- per half-year
    • Rs. 1,20,000/- per year


Also Read: Pradhan Mantri Matsya Sampada Yojana (PMMSY)


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