Last Updated on May 26, 2020 at 4:59 pm
These are the key features of the Pradhan Mantri Vaya Vandana Yojana (Modified- 2020) Scheme that launches today, May 26th 2020.
To understand who should buy this product and who should not, please consult Where should senior citizens invest in 2020?. Let us look at the features of the plan.
What is PM Vaya Vandana Yojana (2020)? It is a non-linked, non-participating, pension plan subsidized by the Centre offering guaranteed pension. It is issued by the LIC. Policy Name: LIC’s Pradhan Mantri Vaya Vandana Yojana (UIN – 512G336V01)
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When does the scheme open? The scheme is available for purchase from My 26th to March 31, 2023. That is, for three financial years.
What is the interest rate? The pension will be given at a rate of 7.4% a year or 0.62% a month. So the effective interest rate is (1+0.62%)^12-1 = 7.66%. These rates only apply to the current financial year. Future rates will be decided later.
What is the duration of the scheme? Ten years
What is the frequency of the pension? Monthly, quarterly, half-yearly or yearly.
What is the maximum and minimum pension possible? Rs. 9,250 per month, Rs. 27,750 per quarter, Rs. 55,500 half-yearly and ₹1,11,000 on an annual payout. The minimum pension is Rs. 1000 a month.
What is the maximum investment amount? Rs. 15 lakh and this is applicable to the total amount of all such policies.
What are the maturity benefits? The purchase price will be returned.
What are the death benefits? The legal heir or nominee will receive the purchase price.
Can we exit prematurely? Yes for treatment of any critical/terminal illness of self or spouse by paying an exit load of 2% of the purchase price.
Does it have a loan facility? 75% of the purchase price can be applied for as a loan after three years.
How to buy PM Vaya Vandana Yojana (2020)? Offline or online via LIC
How is the pension taxed? As per slab like all pensions!
Does it have a free-look up period? Yes, the policy can be returned within 15 days for offline and 30 days for online from the date of receipt of the policy.
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