The Government of India has implemented many social security schemes to ensure financial security during the period of retirement. One of them is Pradhan Mantri Vaya Vandana Yojana or the PMVVY, aimed at senior citizens as a pension scheme. It is run by the Life Insurance Corporation of India and provides attractive returns, pension payment options, and other benefits to secure older adults against financial distress.
In this article, you will get detailed information about the Pradhan Mantri Vaya Vandana Yojana, its benefits, features, eligibility criteria, its application process and much more.
Also Read: Supreme Court Delivers: Pension Scheme Verdict
Overview Of The Pradhan Mantri Vaya Vandana Yojana
| Feature | Details |
|---|
| Launched by | Government of India |
| Managed by | Life Insurance Corporation of India (LIC) |
| Target Audience | Senior citizens above 60 years |
| Interest Rate | 7% to 9% (varies annually) |
| Policy Term | 10 years |
| Pension Payment Frequency | Monthly, Quarterly, Half-Yearly, Yearly |
| Maximum Purchase Price | Rs. 15 lakh |
| Pension Amount | Rs. 1,000 to Rs. 9,250 per month |
What Is Pradhan Mantri Vaya Vandana Yojana (PMVVY)?
PMVVY is a retirement scheme started in May 2017. It works to provide financial security for senior citizens above 60 years of age with guaranteed returns. Managed by LIC, it strikes a balance between regular pension payments and 10 years of term, thus providing a reliable income in retirement.
Benefits
The PMVVY offers various advantages that make it a valuable retirement and pension scheme. These benefits ensure regular income and security. Here's a look at the key benefits provided under the scheme:
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Rate of Return: Assured returns in the range of 7-9% per annum for 10 years.
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Pension Payment: The pension is paid regularly in line with the selected frequency method: monthly, quarterly, half-yearly, or yearly.
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Maturity benefit: On maturity, the purchase price is paid back along with the maturity benefit.
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Loan Facility: A loan up to 75% of the purchase price will become available after the completion of 3 years.
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Death Benefit: Full purchase price payable to the nominee of the policyholder in case of the policyholder's death.
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Surrender Value: Can be surrendered in case of critical illness and 98% of the purchase price will be refunded.
Also Read: A Complete Guide On Unified Pension Scheme (UPS)
Features
The PMVVY scheme offers several features that make it appealing to senior citizens. These features provide flexibility for the policyholder. Let's explore the main features of the scheme:
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Sovereign Guarantee: The scheme is supported by the Indian Government for guaranteed safe investments.
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Pension payment flexibility: One can choose from monthly payments, quarterly payments, half-yearly payments, or yearly payments.
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Tax Benefits: Tax benefits shall be according to the rules applicable under the existing laws of government.
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Free-look period: 15 to 30 days for a policy review, with the opportunity for a return if the policyholder is not satisfied.
Eligibility Criteria Of The Pradhan Mantri Vaya Vandana Yojana
The PMVVY scheme has simple eligibility criteria that ensure senior citizens have access to this secure and beneficial pension plan. The key criteria to apply for the scheme are as follows:
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Age: The applicant must be at least 60 years of age.
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Citizenship: The applicant must be an Indian citizen.
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Policy Term: The applicant must accept a minimum of 10 years for the policy term.
Also Read: National Pension Scheme Detailed Guide
Purchase Price Payment
The purchase price under PMVVY can be made in a lump-sum form. The total etc. should be below Rs15 lakh.
Maximum And Minimum Purchase And Pension Price
The PMVVY will vary its pension amounts based on the purchase price. Pension amounts are thus defined by the purchase price across various payment modes (monthly, quarterly, half-yearly, and yearly). These are indicated in the table below giving minimum and maximum purchase price and the associated minimum and maximum pension ranging over each mode of payment.
| Mode of Pension Payment | Minimum Purchase Price (Investment) | Minimum Pension Amount Against the Purchase Price | Maximum Purchase Price (Investment) | Maximum Pension Amount Against the Purchase Price |
|---|
| Monthly | Rs. 1,62,162 | Rs. 1,000 | Rs. 15,00,000 | Rs. 9,250 |
| Quarterly | Rs. 1,61,074 | Rs. 3,000 | Rs. 14,89,933 | Rs. 27,750 |
| Half-Yearly | Rs. 1,59,574 | Rs. 6,000 | Rs. 14,76,064 | Rs. 55,500 |
| Yearly | Rs. 1,56,658 | Rs. 12,000 | Rs. 14,49,086c | Rs. 1,11,000 |
Pension Payment Modes
Subscribers can choose a mode of payment of pension at the time of applying. The scheme offers options in the following modes:
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Monthly: Pension paid monthly.
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Quarterly: Pension paid every three months.
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Half-Yearly: Pension paid twice a year.
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Yearly: Pension paid annually.
The pension will be paid using NEFT or the Aadhaar Enabled Payment System.
Tax Relaxation On The Pradhan Mantri Vaya Vandana Yojana Scheme
The PMVVY scheme enjoys all other provisions of the Income Tax Act as per the Indian tax laws. All pension payments received will not be subject to taxation during receipt. Any tax liability thereon will arise depending on the taxpayer's overall income and, hence, an income tax scheme prevailing at that time.
Also Read: How To Check Your Pension Application Status?
Premature Exit From The Pradhan Mantri Vaya Vandana Yojana Scheme
Early exit is possible essentially in cases of critical or terminal illness either of the policyholder or their spouse. Such exiting shall permit receipt of 98% of purchases as surrender value.
Examples Of Pension Rates Under The PMVVY Scheme
For any price of Rs. 1,000, the pension rate under various payment options is as follows:
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Monthly: Rs. 80 per annum
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Quarterly: Rs. 80.50 per annum
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Half-Yearly: Rs. 81.30 per annum
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Yearly: Rs. 83 per annum
These amounts are rounded to the nearest rupee.
Exclusion Of The Pradhan Mantri Vaya Vandana Yojana Scheme
In case of the death of a policyholder due to suicide, the nominee will receive the full purchase price.
Application Process Online For Pradhan Mantri Vaya Vandana Yojana
Applying for PMVVY online is a simple and convenient process. By following these steps, one can easily complete the application from the comfort of their home:
Step 1: Access the official LIC website.
Step 2: Click on "Buy Online Policies" and select "Pradhan Mantri Vaya Vandana Yojana."
Step 3: Fill in the application form along with the contact details.
Step 4: Submission of all required documents will ensure final processing.
Also Read: Old Age Pension Scheme | Check Vridha Pension Scheme List and Apply Online
Application Process Offline Pradhan Mantri Vaya Vandana Yojana
For those who prefer applying offline, the process involves visiting the nearest LIC branch. The steps involved are simple. Here's what to do:
Step 1: Visit your nearest branch of LIC.
Step 2: Collect and fill out the application form.
Step 3: The application will be submitted, along with the required documents.
Step 4: After verification, the LIC agent will handle your policy.
Documents Required
When applying for the PMVVY scheme, certain documents are necessary for verification and policy creation. Here's a list of the required documents for the application:
Conclusion
The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is the best pension plan for senior citizens with guaranteed returns and flexible options for pension payment. It guarantees financial security in retirement and offers additional features, such as loan facility and death benefits.
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