The Union Government has extended subscription of Pradhan Mantri Vaya Vandana Yojana by another three years i.e. from March 2020 to March 2023.
However, the government has changed its product structure from fixed return product to variable interest product i.e. the government will revise its interest rates every year depending on the interest rate scenario of the country.
In its current form, PMVVY is a 10 year product. The government has revised its interest rate to 7.4% per annum for FY 2020-21. Investors can choose frequency of payments i.e. monthly/ quarterly/ half-yearly/ yearly at the time of purchase. Investors can also take loan on up to 75% of the purchase price after three years. The scheme also allows premature exit for the treatment of any critical illness. LIC India distributes this scheme on behalf of the government.
Only investors who are retired or aged 60 years and above can invest in this policy. In addition, the minimum investment amount to get annual pension of Rs.12000 is Rs.1.56 lakh and for Rs.1000 per month is Rs.1.60 lakh.
Agents and insurance intermediaries can get commission of up to 0.1% or 10 bps on invested amount under Pradhan Mantri Vaya Vandana Yojana (PMVVY).
