PMVVY: Pradhan Mantri Vaya Vandana Yojana Scheme for senior citizens of India

The Pradhan Mantri Vaya Vandana Yojna is a government subsidised pension scheme for senior citizens managed and operated by Life Insurance Corporation (LIC). The plan came into existence in May 2017.

PMVVY: Last date to invest 

The last date for investing in government’s Pradhan Mantri Vaya Vandana Yojana (PMVVY) pension programme for senior citizens, managed by Life Insurance Corporation (LIC), is March 31, 2023. 

The money invested by the purchasers of the PMVVY scheme is known as the purchase price. The scheme allows an assured return of 7.4 per cent per annum, which can be paid every month for ten years. It is equal to 7.66 per cent per annum. The customer can also choose the pension payment period – monthly, quarterly, half-yearly and yearly. Read on to know more about the PMVVY scheme. 

PMVVY: Eligibility criteria

• The applicant must be sixty years of age while enrolling in the scheme. 
• There is no maximum age limit to entering the PMVVY policy. 
• The minimum policy tenure must be ten years. The applicant must be an Indian citizen. 

PMVVY: Documents required

• Age proof
• Address proof
• Aadhaar card 
• Passport size photo of the applicant 
• Relevant document or declaration form to show the applicant’s retired status.

PMVVY: Application process 

Offline process

• Visit the nearest LIC branch to get an application form. The form is available in all the LIC branches. 
• The applicant must fill out the form and provide the correct details.
• Attach all the required documents needed after self-attesting them. 
• Along with the documents, submit the form to the LIC bank. 

Online process 

• Visit the official website of LIC – https://licindia.in/
• Click on the ‘Products’ column. 
• From the dropdown menu, choose ‘Pension Plans’ and proceed. 

• Complete the application form, which is available under ‘Buy Policies’. 
• Submit the form along with the required documents to proceed further. 

See also: National Pension System: All about NPS

PMVVY: Payment modes

The pensioner can choose the periods for the pension payment to be paid while applying for the scheme. The periods are divided into four categories:

• Monthly payments 
• Quarterly payments 
• Half yearly payments 
• Yearly payments 

The payment modes available are as follows:

• NEFT 
• Aadhaar enabled payment system 

PMVVY scheme validity 

• The scheme validity of Pradhan Mantri Vaya Vandana Yojna can be extended by three years. You can also purchase the scheme offline and online through the official website of LIC. 
• The subscriber can invest up to fifteen lakhs in the scheme (according to the latest Government notification). However, the limit applies only to the person who is investing. For example, if your spouse is older than 60, they can invest up to fifteen lakhs in the scheme separately. 
• The minimum investment in the Pradhan Mantri Vaya Vandana Yojna scheme to avail of Rs 1,000 p.m is Rs 1.5 lakhs.

Returns under PMVVY scheme

• The Pradhan Mantri Vaya Vandana Yojna offers a Government return of 7.4 per cent per annum, payable monthly. 
• Monthly pension scheme – Annual interest is 7.4 per cent = 7.6 per cent p.a.
• The PMVVY scheme is a pension plan, so it does not bargain any GST or service charges. 
• There is no income tax relief in the PMVVY scheme. 
• The returns are taxable in the scheme. 
• The Government of India will take the significant difference between the interest generated by LIC and 7.4 per cent of promised interest. 
• The central government also pays the differential amount to LIC as a subsidy. 

Also read all about Atal Pension Yojana

PMVVY scheme: Pension policy details

• The minimum pension framed under the PMVVY scheme is Rs 1,000 per month. It can go up to Rs 10,000 per month. It depends on the principal invested. 
• To obtain a minimum pension of Rs 1,000 per month, you must invest Rs 1,50,000. To acquire a pension of Rs 10,000 per month, you must invest Rs 1,50,000. 
• If the policy term ranges to ten years, the purchaser reacquires his principal with the final pension instalment after ten years. 
• The principal amount is transferred to the nominated beneficiary’s account if an unfortunate event occurs to the purchaser before completing the ten years.  
• The pension amount will not depend on the subscriber’s age.

Loans under PMVVY Scheme

The schemes under Pradhan Mantri Vaya Vandana Yojna provide the pensioners with a chance to obtain loans if there is any medical emergency for you or their partner. 

• The maximum loan given is seventy-five per cent of the purchase price. 
• The pensioner can apply for the loan only after the completion of three years in the policy. 
• The interest rate against the loan is reacquired from the pension amount per the policy. The outstanding loan is repossessed from the claim proceeds. 

Premature exit in PMVVY scheme

• The Pradhan Mantri Vaya Vandana Yojna (PMVVY) provides a facility for a premature exit if you or your spouse have any critical illness. In this case, the PMVVY policy purchaser will be given 98 per cent of the invested principal. The remaining two per cent will be charged as a premature exit penalty. 
• If the policy purchaser commits suicide, then a hundred per cent of the purchase price will be refunded to the nominee. 

Tax treatment under PMVVY scheme

The charges are made per the tax laws if there is a statutory tax or other tax levied by the government or the constitutional tax authority of India. The tax paid will not be included in the calculation of the overall benefit paid under the pension policy. 

PMVVY exclusion 

There is no exclusion if the pensioner, unfortunately, commits suicide. The total purchase price remains payable. 

PMVVY scheme benefits 

Pension payment 

During the ten years policy term, the pensioner will receive a pension in arrears. Pension in arrears is paid at the end of each period as per the mode chosen. 

Death benefit 

Under the scheme, purchase price is refunded to the beneficiary on the death of the pensioner. It is applicable during the ten years policy term. 

Maturity benefit 

The purchase price, and the final pension instalment will be paid if the pensioner survives the whole ten years of the policy term.

LIC: Contact details 

FAQs

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