Pradhan Mantri Vaya Vandana Yojana (PMVYY)

Pradhan Mantri Vaya Vandana Yojana (PMVYY) Scheme: Pradhan Mantri Vaya Vandana Yojana is a pension scheme managed and controlled by Life Insurance Corporation (LIC) for senior citizens. Over 10 years, the Pradhan Mantri Vaya Vandana Yojana (PMVYY) scheme allows for an annual return of 8 percent per annum payable monthly (equivalent to 8.3 percent per annum). Individuals, more than 60 years can avail of the PM Vaya Vandana Yojana Pension Scheme. The PMVVY pension scheme is applicable for Indian Citizens only. Now let's have a look at the PM Vaya Vandana Yojana details, eligibility, application process from this article.

 

 

 

 

 

Updated: Jun 09, 2020 10:09 IST

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Suganya Vedham

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Pradhan Mantri Vaya Vandana Yojana (PMVYY)

Pradhan Mantri Vaya Vandana Yojana (PMVYY) Scheme:

Pradhan Mantri Vaya Vandana Yojana Scheme is an insurance policy-cum- pension scheme which provides the country's senior citizens with alternative income avenues. This PMVVY pension scheme, supported by the Indian Government, addresses one's need for post-retirement financial planning under National Savings Schemes. To protect senior citizens from volatile market conditions and also to provide socio-economic protection, the government has provided for a 10-year period a continuous payment cycle as a pension at a monthly interest rate of 8 percent that accumulates at an annual rate of 8.30 percent. 

What are the benefits of Pradhan Mantri Vaya Vandana Yojana (PMVYY) Scheme?

The scheme provides the pensioner with 8.00 percent monthly returns p.a. for 10 years. PMVVY is exempt from taxes such as service tax or GST. The pension is payable in arrears at the end of each period throughout the 10 year policy period. Payments are made monthly/quarterly/half-yearly / year according to the pensioner 's preference. The entire sum, including the purchase price and the final benefit fee, is due at the end of the 10-year insurance period when the pensioner lives. Loan up to 75 percent of the Principal Price may be allowed in the scheme after 3 years in the case of an emergency. The interest on this loan is recovered from pension income, while the loan amount is recovered from the receivables.

Who can apply for the Pradhan Mantri Vaya Vandana Yojana (PMVYY) Scheme? 

  • The applicant will be 60 years of age or older (completed) before joining the scheme 

  • There is no maximum age to enter the Policy 

  • Must be an Indian Citizen 

  • Policy minimum term- 10 years

What are the documents required for the Pradhan Mantri Vaya Vandana Yojana (PMVYY) Scheme?

  • Aadhaar Card

  • Proof of Age

  • Proof of Residence

  • Passport size photos of the applicant

  • Relevant Document/Declaration to show the retired status of the applicant

How to apply for the Pradhan Mantri Vaya Vandana Yojana (PMVYY) Scheme?

Online Process:

  • Check out the LIC website 

  • Tap on "Accessories" 

  • Look for Pension Plans and go-ahead 

  • Fill out the required application form under Purchase Policy

  • Submit the form and documents needed for further processing

Offline Process:

  • Types of application are available in all branches of the LIC 

  • The requestor must fill out the form 

  • Attach all necessary documents after checking them for yourself 

  • Submit the form and the documents to any branch of the LIC

What is the Validity of PM Vaya Vandana Yojana Scheme? 

The scheme will remain available for subscription until March 31, 2020, according to the announcement made in Budget 2018. The scheme can be ordered from the LIC website offline as well as online.

Pradhan Mantri Vaya Vandana Yojana- Modes of Payment

Pension payments are made in time intervals chosen by the retiree when applying for the plan. Such cycles are known as annual payments monthly, quarterly, half-yearly. Pension payment methods are as follows-

  • NEFT

  • Aadhaar Enabled Payment System

What is the maximum investment under Pradhan Mantri Vaya Vandana Yojana Scheme? 

The subscriber will invest up to Rs.15 lakhs into the scheme according to the latest government notification. Nevertheless, the cap applies only to the person who invests. So if your spouse is also older than 60 years, she can invest up to Rs. 15 lakhs separately in the scheme. The minimum expenditure to make use of Rs.1000 per month in the scheme is Rs.1.5 lakh.

Returns under Pradhan Mantri Vaya Vandana Yojana (PMVYY)?

Pradhan Mantri Vaya Vandana Yojana (PMVVY) offers an eight percent government return. The 8% annual interest is equivalent to 8.3% if you subscribe to a monthly pension scheme. As the scheme operates simply as a pension fund, it does not incur any GST or service charge. There's no revenue tax relief for the scheme, though. The taxable returns are. The difference between interest generated by the LIC and 8 percent guaranteed returns will be borne by the Indian government. The central government will be paying as a subsidy the difference amount to LIC.

About Pradhan Mantri Vaya Vandana Yojana- Pension Policy:

  • Under the scheme, the minimum pension guaranteed is Rs.1000 per month and can go up to Rs.10,000 per month, depending on the principal invested.

  • Under the scheme, one should invest Rs. 1,50,000 in order to get a minimum pension of Rs.1,000 per month. Likewise, one can get a Rs. 10,000 pension a month with Rs.1.50,000 savings.

  • Since the insurance period is 10 years, the insurance buyer gets back his principal on completion of 10 years with the final pension installment.

  • In the case of the buyer 's death before completing 10 years, the principal sum will be credited to the account of the designated beneficiary. 

  • Ironically, the pension number isn't contingent on the subscriber's age.

Loans under Pradhan Mantri Vaya Vandana Yojana

The scheme helps the pensioners who are enrolled under the scheme to receive loans in the event of a medical emergency such as serious self or spouse illness.Maximum loan granted: 75% of the purchase price. The loan can only be applied for after 3 years in the Scheme Credit against loan shall be recovered from the benefits balance accrued under the scheme, and outstanding loan shall be recovered from the proceeds of the claim

What is the Pradhan Mantri Vaya Vandana Yojana Scheme Premature Exit?

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) also has provisions for a premature exit because of self or spouse's serious illness. For such a scenario, 98 percent of the spent principal would be refunded to the policy consumer. The remaining 2 percent will however, be charged as a penalty for the premature exit. When the policy buyer commits suicide, the candidate must be refunded 100 percent of the purchase price

Till when is the Pradhan Mantri Vaya Vandana Yojana scheme extended?

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) pension scheme has been introduces for the senior citizens in the country. The scheme has now been extended till 31 March 2023. The move by GoI is to enable old age income security and the welfare of Senior Citizens. Under the extension, the scheme is assured with a return of 7.40 percent per annum for FY 2020-21. The annual reset of the rate of return on 1st April of every new FY. The terms & conditions of the scheme remain unchanged.

Pradhan Mantri Vaya Vandana Yojana Scheme- FAQ

1. What are the benefits of Pradhan Mantri Vaya Vandana Yojana Scheme?

The scheme provides the pensioner with 8.00 percent monthly returns p.a. for 10 years. PMVVY is exempt from taxes such as service tax or GST. The pension is payable in arrears at the end of each period throughout the 10 year policy period. Payments are made monthly/quarterly/half-yearly / year according to the pensioner 's preference.

2. What is the application Process for the Pradhan Mantri Vaya Vandana Yojana Scheme?

The application process can be done in both online and offline mode. For online mode application visit the LIC official website and application can be collected from any branch of LIC in case of applying through offline mode.

3. What is the Validity of the Pradhan Mantri Vaya Vandana Yojana Scheme?  

The scheme will remain available for subscription until March 31, 2020, according to the announcement made in Budget 2018. The scheme can be ordered from the LIC website offline as well as online.

4. What are the Payment modes for the Pradhan Mantri Vaya Vandana Yojana Scheme?

Pension payments are made in time intervals chosen by the retiree when applying for the plan. Such cycles are known as annual payments monthly, quarterly, half-yearly. Pension payment methods are NEFT, Aadhaar Enabled Payment System.

5. What is the Maximum Investment under the Pradhan Mantri Vaya Vandana Yojana Scheme?

The subscriber will invest up to Rs.15 lakhs into the scheme according to the latest government notification. Nevertheless, the cap applies only to the person who invests. So if your spouse is also older than 60 years, she can invest up to Rs. 15 lakhs separately in the scheme. The minimum expenditure to make use of Rs.1000 per month in the scheme is Rs.1.5 lakh.