Pradhan Mantri Vaya Vandana Yojana (PMVVY) - An Overview

---

Updated On: 10-Feb-2023 12:26 PM

---

---

Pradhan Mantri Vaya Vandana Yojana (PMVVY) has been widely welcomed by the senior citizens of India as it provides them with a regular income during their retirement years.

Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a government-backed pension scheme launched by the Prime Minister of India, Narendra Modi, in 2017. The scheme is administered by the Life Insurance Corporation of India (LIC) and is aimed at providing a regular income to senior citizens during their old age.

The main objective of PMVVY is to provide an assured pension to senior citizens aged 60 years and above, who are looking for a regular income during their retirement years. The scheme offers an assured rate of return of 7.4% per annum for a period of 10 years. The pension is paid monthly, quarterly, half-yearly or annually, as per the choice of the pensioner.

To enroll in the scheme, individuals need to purchase the pension plan by paying a lump sum amount. The minimum purchase price is Rs. 1.5 lakh and there is no upper limit on the purchase price. The scheme also provides the option of loan facility, which allows the pensioner to take a loan up to 75% of the purchase price after 3 policy years.

The scheme is available for purchase from LIC offices and select branches of banks. The scheme is also available for purchase online through LIC's e-services portal.

How to apply for Pradhan Mantri Vaya Vandana Yojana (PMVVY)

To apply for Pradhan Mantri Vaya Vandana Yojana (PMVVY), one can follow these steps:

1. Visit the official website of the Life Insurance Corporation of India (LIC) - licindia.in.

2. Look for the PMVVY scheme under the "Insurance" or "Policies" section.

3. Click on the "Apply Online" button to start the application process.

4. Fill in the required personal and financial information in the online application form.

5. Upload the necessary documents such as ID proof, address proof, and age proof.

6. Choose the pension plan option and make the required payment online.

7. Submit the completed application form and take a printout for future reference.

8. After submission, the LIC will verify the details and documents provided in the application form.

9. Once the verification process is complete, the LIC will issue a policy certificate with the policy number.

10. The pension amount will be credited to the bank account provided in the application form on a regular basis as per the chosen plan.

It is important to note that, the scheme is only available through Life Insurance Corporation of India (LIC) and not by any other insurance company.

Download
Final-Policy-Document_PMVVY-15-06-2020.pdf

Eligibility for Pradhan Mantri Vaya Vandana Yojana

To be eligible for the Pradhan Mantri Vaya Vandana Yojana (PMVVY) scheme, individuals must meet the following criteria:

• Be 60 years of age or older
• Have no upper age limit
• Have a policy tenure of 10 years
• Earn a minimum pension of Rs. 1,000 per month, Rs. 3,000 per quarter, Rs. 6,000 per half-year, and Rs. 12,000 per year
• Have a maximum pension earning potential of Rs. 10,000 per month, Rs. 30,000 per quarter, Rs. 60,000 per half-year, and Rs. 1,20,000 per year.

Note: The maximum pension ceiling is determined based on the pensioner, their dependents, and spouse as a whole family.

Benefits of Pradhan Mantri Vaya Vandana Yojana (PMVVY)

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) scheme offers several benefits, including:

• An assured return of 8% per year for a policy duration of 10 years
• Pension payments made in arrears, with the option to choose the payment mode
• A death benefit of the purchase price being returned to the beneficiary if the pensioner passes away during the policy tenure
• A maturity benefit of the purchase price and final pension instalment if the pensioner survives the entire policy term
• The option to take out a loan of up to 75% of the purchase price after 3 years of the policy, with the interest to be recovered from pension payments
• A free-look period of 15 days (30 days if purchased online) to surrender the policy if unsatisfied with the terms, with the purchase price minus stamp charges being refunded.

Purchase Price for the Pradhan Mantri Vaya Vandana Yojana

The purchase price for the PMVVY scheme can be paid in a lump sum, and individuals can choose the amount of purchase price or the pension amount they want to receive. The table below shows the minimum and maximum purchase price for different pension modes:

Pension mode	Minimum Purchase Price (Rs.)	Maximum Purchase Price (Rs.)
Monthly	1,50,000	15,00,000
Quarterly	1,49,068	14,90,683
Half-yearly	1,47,601	14,76,015
Yearly	1,44,578	14,45,783

Pension Payment Modes

• Different modes of payment available include monthly, quarterly, half-yearly, and annual.
• Pension payments must be made through Aadhaar Enabled Payment System or National Electronics Fund Transfer (NEFT).
• Depending on the chosen mode, the first transfer must be made within 1 month, 3 months, 6 months, or 1 year from the date of purchasing the policy.

Taxes on the PMVVY Scheme

• Any statutory taxes imposed by the Indian Government or other constitutional tax authorities will be as per the applicable tax laws and rates.
• Taxes paid will not be taken into account for the calculation of benefits payable under the PMVVY scheme.

Premature Exit from the PMVVY Scheme

• Premature exit from the policy is only allowed in the case of terminal or critical illness of the policyholder or their spouse.
• 98% of the purchase price will be paid as the surrender value in such cases.

Pension Rates under the PMVVY Scheme

Listed below are examples of pension rates for a Purchase Price of Rs. 1,000 under different pension payment modes:

• Monthly: Rs. 80 p.a.
• Quarterly: Rs. 80.50 p.a.
• Half-yearly: Rs. 81.30 p.a.
• Yearly: Rs. 83 p.a.

These rates do not take into account the age of the pensioner and the instalment of pension is rounded off to the nearest rupee.

Exclusions of the PMVVY Scheme

• Suicide: The full purchase price is payable and there is no exclusion in case of suicide by the policyholder.

Preventing Fraud under the PMVVY Scheme

• Life Insurance Corporation (LIC) must inform the insured of any fraud related to the policy within 3 years from the date of issuance, start of risks, revival, or addition of rider (whichever is later).
• The insurer must also provide written explanations to the insured or their legal representatives/nominees on why such action was taken.
• Fraud in this context refers to any act committed by the insured or their agent with the intent to deceive the insurer.

PMVVY has been widely welcomed by the senior citizens of India as it provides them with a regular income during their retirement years. The scheme also provides a sense of financial security to the pensioners and their families.

Conclusion

In conclusion, Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a government-backed pension scheme that provides an assured pension to senior citizens aged 60 years and above. The scheme offers an assured rate of return of 7.4% per annum for a period of 10 years and is administered by the Life Insurance Corporation of India (LIC). PMVVY has been widely welcomed by the senior citizens of India as it provides them with a regular income during their retirement years and a sense of financial security to the pensioners and their families.

Frequently Asked Questions about the Pradhan Mantri Vaya Vandana Yojana (PMVVY)

1. What documents are required to invest in the PMVVY scheme?

• Permanent Account Number (PAN) Card
• Proof of address (such as Passport or Aadhaar Card)
• Copy of the cheque leaf or the first page of the bank passbook (where pension will be credited)

2. What is the application process for the PMVVY scheme?

• Submit the application form along with the required documents.
• You can also invest online by visiting the official website of LIC and going to the 'Pension Plans' section.
• Visit any LIC office to submit the application form if you wish to invest offline.

3. Are there any tax benefits for investments in the PMVVY scheme?

• No, unlike other pension schemes, no tax benefits can be claimed for investments in the PMVVY scheme.

4. When is the PMVVY policy open?

• The policy was open for a short duration and then extended till 31 March 2020.

5. What are the ways I can invest in the PMVVY scheme?

• You can invest in the scheme both online and offline.
• Invest online by visiting the official website of LIC and going to the 'Pension Plans' section.
• Invest offline by visiting any LIC office and submitting the application form.