The Life Insurance Corporation (LIC) will launch the modified Pradhan Mantri Vaya Vandana Yojana on Tuesday. The plan offering an assured rate of return of 7.40 per cent will be available for sale for three financial years i.e. upto 31st March, 2023. This scheme can be purchased offline as well as online from LIC of India at LIC is solely authorised to operate this scheme, said LIC on Monday.


The earlier Pradhan Mantri Vaya Vandana Yojana that closed in March, 2020, was offering an assured rate of return of 8 per cent. The government decided withdrew the scheme and preferred to replace it with a bit lower paying return to minimise its subsidy and to adjust with the falling interest rates in the system.   


The Government of India has now introduced with modified rate of pension for citizens aged 60 years and above. The modified scheme is a  Non-Linked, Non-Participating pension scheme subsidized by the Government of India.


The policy term is of 10 years and for policies sold during the first financial year i.e. up to 31st March 2021, the Scheme will provide an assured rate of return of 7.40 per cent annually, payable monthly (i.e. equivalent to 7.66 per cent.p.a.) for the entire duration of 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 ministry of finance,Government of India. 


Total amount of purchase price under all the policies under this plan (UIN: 512G336V01) and all the policies taken under earlier versions of Pradhan Mantri Vaya Vandana Yojana (with UIN 512G311V01 and UIN: 512G311V02) allowed to a senior citizen shall not exceed Rs15 lakhs.  


The scheme can be purchased by payment of a lump sum purchase price.The pensioner has an option to choose either the amount of pension or the purchase price. At the time of purchase, the pensioner can choose monthly/quarterly/half yearly or yearly mode of  pension.

The minimum purchase price for monthly mode is Rs 1,62,162/-,for quarterly mode Rs 1,61,074/-,half yearly the same is Rs 1,59,574/- & for Yearly mode Rs 1,56,658/-

The maximum pension one can get under this Scheme will be Rs. 9,250/- per month, Rs. 27,750/- per quarter, Rs. 55,500/- per half-year and Rs. 1,11,000/- per year.
On survival of the pensioner during the policy term, Pension in arrears (at the end of each period as per mode chosen by the Pensioner) shall be payable.On death of the pensioner during the policy term, the purchase price shall be refunded to the nominee/legal heirs. On survival of the pensioner to the end of the policy term, purchase price and the final pension installment shall be payable.


Loan upto 75 per cent of purchase price is allowed after three policy years. 

The scheme also allows for premature exit for treatment of any critical/terminal illness of self or spouse .The durrender value payable in such cases shall be 98 per cent of purchase price.