In line with the Budget 2018 announcement, the central government has hiked the investment limit under Pradhan Mantri Vyay Vandana Yojana (PVVY), a social security scheme for senior citizens, from Rs.7.50 lakh to Rs.15 lakh.
The government has also extended the investment time frame under this scheme from May 4, 2018 to March 31, 2020.
LIC India distributes this scheme on behalf of the government. Distributors and agents can earn a commission of 0.1% or 10 basis points on the scheme. In addition, the government has exempted the scheme from GST. This means, distributors selling this scheme will not have to pay GST on their commissions.
PMVVY gives an assured return of 8% p.a. payable monthly (effective returns of 8.30%) for 10 years. Pension is payable at the end of each period. Investors can choose frequency of payments i.e. monthly/ quarterly/ half-yearly/ yearly at the time of purchase. Investors can also take loan of up to 75% of the purchase price after three years. The scheme also allows premature exit for the treatment of any critical illness.