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Pradhan Mantri Vaya Vandana Yojana (PMVVY) – Eligibility, Benefits & How to Invest for Your Retirement

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Last Updated on September 6, 2023 by Sumitha

Pradhan Mantri Vaya Vandana Yojana

India’s government continually introduces social security schemes to address the evolving needs of its citizens. Popular schemes like the Public Provident Fund (PPF), Atal Pension Yojana, and National Pension Scheme have long served those planning their retirements. The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a recent addition to this list.

PMVVY, administered by the Life Insurance Corporation of India (LIC), the nation’s largest life insurer, is a comprehensive retirement and pension scheme. Here, we delve into the intricacies of this scheme, its eligibility criteria, and the myriad benefits it offers.

What is Pradhan Mantri Vaya Vandana Yojana (PMVVY)?

Launched by the Indian government in May 2017, PMVVY is a subsidized retirement cum pension scheme. It assures policyholders a return on investment backed by sovereign guarantees, making it an attractive option compared to traditional bank deposits. The scheme disburses regular pension payments, with frequencies ranging from monthly to yearly.

Eligibility for PMVVY

To enrol in PMVVY, one must meet the following eligibility criteria:

  • Be a senior citizen aged 60 years or above.
  • Hold Indian citizenship.
  • Be prepared to commit to a policy term of ten years.

The scheme offers varying minimum and maximum pension amounts, with a total purchase price cap of Rs. 15 lakhs.

Documents Required for PMVVY

Applicants must provide specific documents to enrol in PMVVY, including:

  • Aadhaar card
  • PAN card
  • Proof of age
  • Proof of address
  • Proof of income
  • Bank account passbook
  • Passport-size photo of the applicant
  • Documents indicating retirement from employment

Benefits of PMVVY

PMVVY offers a range of benefits, including:

  • Assured returns: Subscribers can enjoy a fixed return between 7% to 9% for ten years.
  • Maturity benefit: At the end of the policy term, the entire amount, including the final pension and purchase price, is disbursed.
  • Pension payment: Regular pension payments are made based on the chosen frequency.
  • Death benefit: In the event of the policyholder’s demise during the term, the beneficiary receives the purchase price.
  • Loan benefit: Policyholders can avail of a loan of up to 75% of the purchase price after three years.
  • Surrender value: Premature exit is allowed under exceptional circumstances.
  • Free look period: Unsatisfied policyholders can return the policy within 15 days (30 days if purchased online).
  • Exclusion: The purchase price is payable in case of policyholder suicide.

Application Procedure for PMVVY

You can subscribe to PMVVY through online or offline methods:

Online Procedure:

  1. Visit the official LIC website.
  2. Click on ‘Buy Online Policies.’
  3. Select ‘Pradhan Mantri Vaya Vandana Yojana.’
  4. Complete the application form and submit it online.

Offline Procedure:

  1. Collect the application form from any LIC branch.
  2. Fill out the form and submit it with relevant documents.

Payment of Purchase Price Under PMVVY

PMVVY requires a lumpsum purchase price. Pension payments begin the month after purchase for monthly payments. Rates vary based on the chosen mode:

  • Monthly: 7.40%
  • Quarterly: 7.45%
  • Half-yearly: 7.52%
  • Yearly: 7.66%

Maximum and Minimum Purchase and Pension Price

Purchase price and pension amounts vary based on the chosen mode:

  • Monthly: Rs. 1,62,162 – Rs. 15,00,000
  • Quarterly: Rs. 1,61,074 – Rs. 14,89,933
  • Half-yearly: Rs. 1,59,574 – Rs. 14,76,064
  • Yearly: Rs. 1,56,658 – Rs. 14,49,086

Taxability Provisions of PMVVY

PMVVY is not a tax-saving scheme; returns are taxed based on applicable rates. It is exempt from GST, but deductions under Section 80C of the Income Tax Act do not apply.

How to Check PMVVY Policy Details?

To check your PMVVY policy details:

  1. Visit the Umang PMVVY page.
  2. Click ‘Open’ under ‘Policy Basic details.’
  3. Log in with MPIN or OTP.
  4. Enter the required details and view policy information.

Contact Details of the PMVVY Policy

For queries related to PMVVY, contact:

PMVVY is a sound investment option for senior citizens seeking a regular pension. While it requires substantial upfront investment, the assured returns and financial security it offers make it a valuable choice.

Frequently Asked Questions

1. Do interest rates change in the PMVVY scheme?

Yes, interest rates are revised by the government annually.

2. Can a policyholder invest in PMVVY multiple times?

Yes, a policyholder can invest multiple times, but the total purchase price must not exceed Rs. 15 lakhs.

3. Can both husband and wife invest in PMVVY?

Yes, both spouses can invest up to Rs. 15 lakhs each.

4. How to claim the purchase price of PMVVY by a beneficiary/nominee upon the death of a policyholder within 10 years?

The beneficiary/nominee should initiate a claim by informing the LIC branch office and submitting the required documents. LIC will then return the purchase price.

Sumitha

I'm a professional content creator passionate about writing. My articles span law, business, finance, investments, and government schemes, always simplifying complex topics. Exploring and embracing novelty are my off-duty joys.