New Delhi: Union finance minister Arun Jaitley will on Friday formally launch the Pradhan Mantri Vaya Vandana Yojana (PMVVY) a new pension scheme exclusively for the senior citizens. The scheme provides an assured return of 8 per cent per annual payable monthly (equivalent to 8.30 per cent per annual effective) for 10 years. The 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 instalment shall be payable. Loan upto 75 per cent of purchase price will be allowed after three policy years to meet the liquidity needs of the subscribers. Loan interest will be recovered from the pension instalments 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 per cent 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 scheme has been available from May 4, 2017 to May 3, 2018. The scheme can be purchased offline as well as online through Life Insurance Corporation of India which has been given the sole privilege to operate this scheme.