Although the government increased the Senior Citizen Saving Scheme (SCSS) funding cap by Rs. 15 lakh to Rs. 30 lakh, it should be noted that the Pradhan Mantri Vaya Vandana Yojana (PMVVY), is scheduled to expire on March 31, 2023. Currently, PMVVY allows retirees to invest up to Rs 15 lakh and make returns that are almost risk-free. However, no word of its extension has been made as of yet. As a result, starting on April 1, 2023, senior citizens will be able to invest an additional Rs 15 lakh in SCSS, which means that the other option to invest Rs 15 lakh in a similar plan will no longer be available.
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Senior people can feel secure, thanks to the Pradhan Mantri Vaya Vandana Yojana (PMVVY), an insurance policy-cum-pension programme. Life Insurance Corporation (LIC) offers this pension plan to meet the need for post-retirement financial preparation. The scheme was introduced in response to the popularity and success of the Varishtha Pension Bima Yojana 2003 (VPBY-2003) and Varishtha Pension Bima Yojana 2014 (VPBY-2014) schemes with the intention of protecting seniors from 60 years of age and older against a potential decline in their interest income due to uncertain market conditions.
According to the plan, subscribers will receive an assured pension payable on a monthly basis. Only if the investors have given an initial lump sum amount ranging from a minimum of Rs 1,50,000 and a maximum amount of Rs 7,50,000. For Rs 1.5 lakh an investor will receive a pension of Rs 1000 per month while for Rs 7.5 lakh an investor will receive a pension of Rs 5,000 per month.
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The government prolonged PMVVY, which was previously accessible from May 4, 2017, to March 31, 2020, for an additional three fiscal years until March 31, 2023. For the years 2022–2023 and subsequent years, the plan will provide an assured rate of return of 7.40% per year, to be reset every year.
Benefits
If the pensioner survives the ten-year policy term, the pension in arrears will be paid (at the end of each month according to the mode selected).
The purchase price will be returned to the beneficiary in case the pensioner dies within the policy’s 10-year period. Purchase price and final pension instalments are due if the pensioner lives to the end of the 10-year policy term. The maximum stake permitted is 15 lakhs.
After three policy years are complete, a loan facility is accessible. 75 percent of the purchase price can be borrowed up to the utmost allowed. At regular intervals, the rate of interest that will be applied to the loan sum will be decided.
