LIC's Pension Plan: LIC launches pension scheme that offers Rs 10,000/month for senior citizen

LIC Pension Plan: Life Insurance Corporation of India (LIC), India's largest insurer has launched Pradhan Mantri Vaya Vandana Yojana (PMVVY) for senior citizens aged 60 years and above. LIC's PMVVY pension scheme is non-linked and non-participating subsidized by the Centre. The finance ministry had recently modified PMVYY pension scheme and extended the pension plan till 31 March, 2023 with an assured interest rate of 7.40% p.a. for FY 2020-21. According to LIC, Pradhan Mantri Vaya Vandana Yojana offers a guaranteed monthly income of up to ₹10,000 for 10 years.

“For the policies sold during the next two financial years, the applicable assured rate of interest, at which the pension payment shall be made, will be reviewed and decided at the beginning of each financial year by the finance ministry,” said LIC in its release.

The pensioner can choose monthly, quarterly, half yearly or yearly mode of pension. Citizens above 60 years of age can invest in this scheme and enjoy guaranteed monthly income benefit. The scheme will provide an assured rate of return of 7.40% per annum in FY21. For investors investing this financial year will get 7.40% per annum payable monthly for entire duration of ten years.

Senior citizens can draw a minimum pension of ₹1,000 per month depending on the amount invested in the scheme. The maximum pension one can get under this scheme will be Rs 9,250 per month. This scheme can be purchased offline as well as online from LIC. 

The minimum purchase price for monthly mode is ₹1,62,162, ₹1 ,61,074 for quarterly pension, ₹1,59,574 for half-yearly mode and ₹1,56,658 for yearly mode. The maximum pension one can get under this scheme will be ₹9,250 per month, ₹27,750 per quarter, ₹55,500 half-yearly and ₹1,11,000 on annual payout basis, LIC said.

Meanwhile, PMVVY is the ideal plan for senior citizens, said LIC's former Development Officer. Proper monetary planning for retirement can benefit one a long way in twilight years as old age comes with a number of problems.

Speaking with IndiaTv, LIC Guru Kamlesh Gurbuxani, former Development Officier at LIC of India, said "PMVVY is Govt. of India's scheme managed by LIC of India. It is for Senior citizens aged 60 and above, it gives a guaranteed effective interest rate of 8.30% p.a. over a period of 10 years. After 10 years the amount invested will be refunded."

Eligibility Conditions and Other Restrictions:

a) Minimum Entry Age: 60 years (completed)

b) Maximum Entry Age: No limit
c) Policy Term: 10 years
d) Minimum Pension: Rs. 1,000/- per month
 Rs. 3,000/- per quarter
 Rs.6,000/- per half-year
 Rs.12,000/- per year
e) Maximum Pension: Rs. 10,000/-per month
 Rs. 30,000/-per quarter
 Rs. 60,000/- per half-year
 Rs. 1,20,000/- per year
The ceiling of maximum pension is per senior citizen i.e. total amount of pension under all
the policies under this plan, including policies taken under Pradhan Mantri Vaya
Vandana Yojana with UIN: 512G311V01, allowed to a senior citizen shall not exceed
the maximum pension limit. 

Benefits:

a. Pension Payment :
On survival of the Pensioner during the policy term of 10 years, pension in arrears (at
the end of each period as per mode chosen) shall be payable.
b. Death Benefit:
On death of the Pensioner during the policy term of 10 years, the Purchase Price shall
be refunded to the beneficiary.
c. Maturity Benefit:
 On survival of the pensioner to the end of the policy term of 10 years, Purchase price
along with final pension installment shall be payable.