LIC Current Affairs

Government launches Pradhan Mantri Vaya Vandana Yojana for senior citizens

The Union Finance Ministry has launched Pradhan Mantri Vaya Vandana Yojana (PMVVY), a pension scheme exclusively for senior citizens aged 60 years and above.

Under this scheme, senior citizens will get a guaranteed interest of 8% for 10 years depending upon the investment made by them.

Features of PMVVY

This PMVVY scheme will be available from May 4, 2017 to May 3, 2018. Life Insurance Corporation of India (LIC) has been given the sole privilege to operate the scheme. It can be purchased offline as well as online through LIC.

This scheme provides an assured return of 8% per annum payable monthly for 10 years on single lumpsum premium ranging from Rs. 150000 (minimum) to Rs.750000 (maximum). Pension (minimum: Rs.1000/ month; maximum: Rs.5000) will be 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.

It is exempted from goods and services (GST) tax. It will offer senior citizens more avenues to earn steady regular income at a time of falling interest rates. On survival of the pensioner to the end of the policy term of 10 years, the purchase price of the scheme along with the final pension instalment will be payable.

The scheme also offers loan up to 75% of the purchase price after 3 policy years (to meet the liquidity needs). Loan interest will be recovered from the pension instalments and loan will be recovered from claim proceeds.

The scheme 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 would be refunded. On death of the pensioner during the policy term of 10 years, the purchase price should be paid to the beneficiary.

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Union Cabinet approves Varishtha Pension Bima Yojana 2017

The Union Cabinet has given its approval for launching of Varishtha Pension Bima Yojana 2017 (VPBY 2017).  The scheme will be launched as part of Government’s commitment for financial inclusion and social security.

The scheme will be implemented through Life Insurance Corporation of India (LIC) during the current financial year i.e. FY 2016-17. It will be open for subscription for a period of one year from the date of launch.

Features of Scheme
  • The purpose of the scheme is to provide social security during old age and protect elderly persons aged 60 years and above against future fall in their interest income due to uncertain market conditions.
  • It will provide an assured pension based on a guaranteed rate of return of 8% per annum for ten years, with an option to opt for pension on a monthly, quarterly, half yearly and annual basis.
  • The Union Government will bear the differential return i.e., the difference between the return generated by LIC and the assured return of 8% per annum as subsidy on an annual basis.

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