Do you know what is Pradhan Mantri Vaya Vandana Yojana? Pradhan Mantri Vaya Vandana Yojana is a pension scheme. This scheme was declared by the Government of India. PMVVY scheme is only for the senior citizens of the country. The scheme was launched on 4th May 2017.
Pradhan Mantri Vaya Vandana Yojana Scheme is handled by the Life Corporation of India. The main motto of this scheme is to provide financial support to senior citizens depending on the subscription amount. The PMVVY scheme assured a return of 7.40% per annum for the ongoing financial year.
Investors can start receiving pensions as soon as they turn 60 under the Pradhan Mantri Vaya Vandana Yojana.
Pradhan Mantri Vaya Vandana Yojana Benefits:
- Pradhan Mantri Vaya Vandana Yojana benefits are as follows-
- Pension is payable at the end of each period, during the policy term of 10 years. As per the commonness of monthly/ quarterly/ half-yearly/ yearly as chosen by the individual at the time of investment.
- The scheme is free from GST
- The duration of the policy is of 10 years and the purchase price along with the final pension installment shall be payable
- Loan up to 75% of Purchase Price shall be allowed after 3 policy years. Loan interest shall be retrieved from the pension installments and loan to be retrieved from claim returns
- The scheme also allows for early withdrawal for the therapy of any critical/ terminal condition of self or partner. On such premature exit, 98% of the Purchase Price shall be repaid
- On the death of the individual during the policy term of 10 years, the Purchase Price shall be paid to the heir
- The ceiling of maximum pension is for a family as a whole, the family will include an individual, his/her spouse, and dependents
Pradhan Mantri Vaya Vandana Yojana Eligibility:
Pradhan Mantri Vaya Vandana Yojana age limit-
Minimum age criteria- 60 years
Maximum age criteria- No limit
Term Insurance Policy Active Time- 10 years
Investment Limit- Rs 15 lakh per senior citizen
Rs. 1,000/- per month
Rs. 3,000/- per quarter
Rs. 6,000/- per half-year
Rs.12,000/- per year
Rs. 9,250/- per month
Rs. 27,750/- per quarter
Rs. 55,500/- per half-year
Rs. 1,11,000/- per year
The ceiling of maximum pension is for a family as a whole i.e. total amount of pension under all the policies allowed to a family under this plan shall not exceed the maximum pension limit. The family for this purpose will comprise of pensioner, his/her spouse, and dependents.
Individuals can apply for the scheme online or offline through Life Insurance Corporation (LIC). LIC has been granted the only license to operate this scheme. For the registration process, you can visit the LIC website.
Payment of Purchase Price:
The scheme can be purchased by payment of a lump sum Purchase Price. The individual has an option to choose either the amount of pension or the Asset Price. The minimum and maximum Purchase Prices under different modes of pension are as follows:
|Mode of Pension||Minimum Purchase Price||Maximum Purchase Price|
|Yearly||Rs. 1,56,658/-||Rs. 1,449,086/|
|Monthly||Rs. 1,62,162/-||Rs. 15,00,000/-|
Documents Required For Pradhan Mantri Vaya Vandana Yojana
- Aadhaar card
- Proof of age
- Proof of address
- Passport size photo of the applicant
- Documents indicating that the applicant has retired from employment
Pradhan Mantri Vaya Vandana Yojana Features:
Mode of pension payment-
The pension payment modes are monthly, quarterly, half-yearly, and yearly. The pension payment shall be through NEFT or Aadhaar Enabled Payment System.
The first installment of pension shall be paid after 1 year, 6 months, 3 months, or 1 month from the date of purchase. And it depends on the mode of pension revenue i.e. yearly, half-yearly, quarterly, or monthly.
The scheme allows early withdrawal during the policy term under some special circumstances. Like the individual requiring money for the treatment of any critical/terminal illness of self or partner. The Surrender Value payable in such cases shall be 98% of the Purchase Price.
The loan facility is available after the completion of 3 policy years. The maximum loan that can be granted shall be 75% of the Purchase Price.
The rate of interest to be charged for the loan amount shall be determined at periodic intervals. For the loan sanctioned in Financial Year 2016-17. The applicable interest rate is 10% p.a. payable half-yearly for the entire term of the loan.
Loan interest will be retrieved from the pension amount expected under the policy. The Loan interest will accrue as per the frequency of pension payment under the policy and it will be due on the due date of pension. However, the loan outstanding shall be recovered from the claim proceeds at the time of exit.
Free Look period-
If a policyholder is not satisfied with the “Terms and Conditions” of the policy, he/she may return the policy to the Corporation within 15 days from the date of the receipt remarking the reasons of complaints. If an individual purchased an Insurance Policy online then he/ she can return the policy in 30 days.
The amount to be refunded within the free look period shall be the Purchase Price deposited by the policyholder after subtracting the charges for Stamp duty and pension paid if any.
Here, we cover a small piece of information about the Pradhan Mantri Vaya Vandana Yojana. For the application process and to know more about other schemes you can visit the PM Vaya Vandana Yojana website. Stay tuned to get notified about the other Government schemes.