National insurer LIC on Monday said the modified centrally-subsidised pension scheme, PM Vaya Vandana Yojana (PMVVY), for those over 60 years of age will be available for sale from Tuesday.
The government introduced the PMVVY (modified-2020), with the modified rate of pension for those over 60 years and above, and LIC is solely authorised to run the scheme that offers a total payout not exceeding Rs 15 lakh.
The scheme is a non-linked, non-participating, pension scheme subsidized by the Centre.
This plan will be available for sale commencing from Tuesday for three financial years up to March 2023, LIC said in a statement, adding that the scheme can be purchased offline as well as online from LIC website.
The policy has a 10-year tenure and for policies sold in the first financial ending March 2021, the scheme will provide an assured rate of return of 7.40 per cent per annum, but will be payable monthly for the entire duration of 10 years.
For policies sold during the next two financial years, the applicable assured rate of interest will be reviewed and decided at the beginning of each financial year by government, LIC said.
Total amount of purchase price under all the policies under this plan and all the policies taken under earlier versions of the scheme allowed to a senior citizen shall not exceed Rs 15 lakh.
The scheme can be purchased by a lump sum purchase price and the pensioner has the option to choose either the amount of pension or the purchase price. At the time of buying the scheme, the pensioner can choose monthly/quarterly/half yearly or yearly mode of pension.
The minimum purchase price for monthly mode is Rs1,62,162, Rs 1,61,074 for quarterly pension, Rs 1,59,574 for half-yearly mode and Rs 1,56,658 for yearly mode.
The maximum pension one can get under this scheme will be Rs 9,250 per month, Rs 27,750 per quarter, Rs 55,500 half-yearly and Rs 1,11,000 on annual payout basis, LIC said.
On survival of the pensioner during the policy term, pension in arrears (at the end of each period as per mode chosen) shall be payable, LIC said, adding that on death of the pensioner during the policy-term, the purchase price shall be refunded to the nominee/legal heirs.
If the pensioner lives through the policy term, the purchase price and the final pension installment shall be payable.
The policy also allows loan up to 75 per cent of purchase price after three policy years.
The scheme also allows for premature exit for treatment of any critical/terminal illness of self or spouse and the surrender value payable shall be 98 per cent of the purchase price.