Archive / Investment Adviser (Level 2) / Retirement Products
nism-series-xb-pradhan-mantri-vaya-vandana-yojana-features[ INVESTMENT ADVISER (LEVEL 2) ]
What were the core features of the 'Pradhan Mantri Vaya Vandana Yojana' (PMVVY) administered by LIC of India for senior citizens?
[ A ]A 30-day speculative stock scheme.
[ B ]A scheme for children aged below 5.
[ C ]PMVVY provides a 50% cash discount on airline tickets.
[ D ]A 10-year government-subsidized immediate annuity scheme for senior citizens aged 60+, with maximum investment limit of ₹15,00,000 (₹15 Lakhs), paying assured monthly/quarterly/annual pensions with 100% return of purchase price.[ CORRECT ]
Takeaway
The correct answer is D: PMVVY was a 10-year government-backed immediate annuity scheme run by LIC for seniors aged 60+, capped at ₹15 lakh investment, paying assured periodic pensions with full return of purchase price at the end of the term.
Derivation
PMVVY functioned as a pension-guarantee product rather than a market-linked investment: a senior citizen deposited a lump sum (up to the ₹15 lakh ceiling) with LIC and, in exchange, received an assured pension at a fixed rate payable monthly, quarterly, half-yearly or annually for a fixed 10-year term. Crucially, unlike a standard immediate annuity that permanently forfeits the capital, PMVVY returned 100% of the purchase price back to the annuitant (or nominee, on death) at the end of the 10 years, making it attractive to retirees who wanted guaranteed income without giving up their principal permanently -- a feature this question is testing recall of.
Why the others fail
A — A 30-day speculative stock scheme.
Absurd mischaracterization; PMVVY was a guaranteed government pension product for seniors, not a speculative short-term stock scheme.
B — A scheme for children aged below 5.
Contradicts the eligibility criteria entirely; PMVVY was exclusively for senior citizens aged 60+, not children under 5.
C — PMVVY provides a 50% cash discount on airline tickets.
Fabricated and irrelevant; PMVVY provided guaranteed pension payouts, it had no connection to airline ticket discounts.
Related questions
nism-series-xb-section-10-10-iii-gratuity-not-covered-employeesInvestment Adviser (Level 2)
How Is Tax-Exempt Gratuity Calculated for Employees Not Covered Under the Gratuity Act?nism-series-xb-section-54-capital-gains-residential-house-exemptionInvestment Adviser (Level 2)
How to Calculate Section 82 (Formerly 54) Capital Gains Exemption on Property Salenism-series-xb-section-56-gift-taxation-immovable-propertyInvestment Adviser (Level 2)
How is Property Transferred Below Stamp Duty Value Taxed under Section 92(2)(m) (Formerly 56(2)(x))?