Life Insurance Corporation (LIC) of India, which offers various insurance plans like endowment plans, money back plans, term insurance plans, also offers pension plans. LIC Pradhan Mantri Vaya Vandana Yojana is one such pension plan being offered by the country’s largest life insurance company. The government has modified rate of pension for Pradhan Mantri Vaya Vandana Yojana and extended the period of sale of this plan for a further period of three years from financial year 2020-21 till March 31, 2023. As per the terms and conditions under this plan, guaranteed rates of pension for policies sold during a year will be reviewed and decided at the beginning of each year by the Ministry of Finance. For the first financial year upto March 31, 2021, the scheme will provide an assured pension of 7.40 per cent per annum payable monthly, LIC said on its website.
- LIC’s Pradhan Mantri Vaya Vandana Yojana provides immediate pension for senior citizens of 60 years and above. It can be purchased by paying a lumpsum amount , LIC said on its website.
- The plan provides for pension payments for the policy term of 10 years, with return of purchase price at the end of tenth year.
- The first installment of pension shall be paid after 1 year, 6 months, 3 months or 1 month from the date of purchase of the same depending on the mode of pension payment i.e. yearly, half-yearly, quarterly or monthly respectively.
- Pension payments can be availed by the subscriber on monthly, quarterly, half-yearly or yearly basis. In case of death of the subscriber the purchase price of the plan would be refunded to the legal heirs.
- The Pradhan Mantri Vaya Vandana Yojana can be purchased without any medical examination and premature exit is allowed during policy term under exceptional circumstances like critical/terminal illness of self or spouse .
- Surrender value payable in such cases is 98 per cent of the purchase price, according to the information on LIC’s website.
- The subscribers of the plan also get to avail loan from the Life Insurance Corporation of India after complying with the policy for three years.
- The maximum loan amount offered by the LIC is 75 per cent of the purchase price.