Pradhan Mantri Vaya Vandana Yojana is a non-linked, non-participating, pension scheme that is subsidised by the Government of India. The scheme is completely operated by Life Insurance Corporation (LIC). In this article, we will discuss in detail the coverage, benefits, eligibility, claim process, and tax implications with Pradhan Mantri Vaya Vandana Yojana (PMVVY).
What is PMVVY?
The government had initiated the Pradhan Mantri Vaya Vandana Yojana (PMVVY) to offer social security during old age and safeguard individuals aged 60(completed) and above against potential decreases in their interest income due to unpredictable market conditions. This scheme ensures old age income security for senior citizens by providing a guaranteed pension/return linked to the subscription amount, backed by government assurance to the Life Insurance Corporation of India (LIC). PMVVY guarantees a fixed pension payout at a predetermined rate for 10 years, offering a reliable return of 7.4% per annum payable over the entire duration of 10 years.
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Eligibility criteria for PMVVY
To claim the benefits of the scheme, you need to fulfill the below-mentioned eligibility criteria:
| Criteria | Eligibility |
| Minimum entry age | 60 years |
| Maximum entry age | No limit |
| Policy term | 10 years |
| Minimum pension | Rs. 1,000 per month Rs. 3,000 per quarter Rs. 6,000 per half-year Rs. 12,000 per year |
| Maximum pension | Rs. 9,250 per month Rs. 27,750 per quarter Rs. 55,500 per half-year Rs. 1.11 lakh per year |
PMVVY (Pradhan Mantri Vaya Vandana Yojana): Benefits & Features
Given below are the key features and benefits of Pradhan Mantri Vaya Vandana Yojana (PMVVY):
Pension payment:
If the pensioner survives the 10 year policy term, pension payments will be made in arrears at the end of each chosen period.
Death benefit:
In the event of the pensioner's demise within the 10 year policy term, the purchase price will be refunded to the beneficiary.
Maturity benefit:
Upon the Pensioner surviving until the end of the 10 year policy term, the Purchase Price, along with the final pension installment, will be paid out.
Mode of pension payment:
The available options for pension payment include monthly, quarterly, half-yearly, and yearly. Pension payments will be facilitated through either NEFT or the Aadhaar Enabled Payment System. The timing of the first pension installment varies depending on the chosen pension payment frequency: yearly, half-yearly, quarterly, or monthly, with the first payment occurring after 1 year, 6 months, 3 months, or 1 month respectively from the purchase date.
Surrender value:
The plan permits early withdrawal during the policy period under extraordinary circumstances, such as if the pensioner needs funds for the treatment of critical/terminal illness for themselves or their spouse. in such instances, the surrender value payable will be 98% of the purchase price.
Loan:
The option to obtain a loan becomes accessible after three policy years have elapsed. The maximum loan amount granted will be 75% of the purchase price.
Free look period:
In case the policyholder finds the ‘Terms and Conditions’ unsatisfactory, they have the option to return the policy to the Corporation within 15 days (or 30 days if purchased online) from the date of receiving the policy, while stating their reasons for objections.
Assurance of returns:
The Pradhan Mantri Vaya Vandana Yojana interest rate will begin with a guaranteed annual return of 7.40% for the fiscal year 2023-24, and subsequently, it will be adjusted annually.
Documents required to apply for Pradhan Mantri Vaya Vandana Yojana (PMVVY)
Given below are a few documents that you must keep handy when applying for Pradhan Mantri Vaya Vandana Yojana (PMVVY):
- Aadhaar card
- PAN card
- Details of preferred bank account
