PM Vaya Vandana Yojana: The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a pension scheme specifically designed to provide financial stability to senior citizens. With a guaranteed rate of return, PMVVY offers pensioners the opportunity to secure their future and lead a dignified life during their golden years.
What is Pradhan Mantri Vaya Vandana Yojana (PMVVY)?
The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a government-backed pension scheme that was launched in 2017 by the Indian Government. The scheme is specifically designed to provide financial security and stability to senior citizens above the age of 60 years. The PMVVY scheme is administered by the Life Insurance Corporation of India (LIC), a leading insurance provider in the country.
PM Vaya Vandana Yojana Guaranteed Rate of Return
The scheme offers a guaranteed rate of return on the pension investment, which provides pensioners with a regular and stable income during their retirement years. The pension rates under PMVVY range from 7.4% to 8% per annum, depending on the mode of payment chosen by the pensioner. The policy term for the scheme is 10 years, and policyholders can avail of loans up to 75% of the purchase price of the policy after three policy years. The scheme also offers a surrender value, which is payable in case of premature exit from the scheme.
For the financial year 2021-22, the Pradhan Mantri Vaya Vandana Yojana offers different interest rates based on the frequency of pension payment. If pension payment is made monthly, the PMVVY interest rate is 7.40%. If payment is made quarterly, the interest rate is 7.45%. For half-yearly payment, the interest rate is 7.52%, and for yearly payment, the interest rate is 7.66%. These rates are guaranteed and provide a stable source of income for pensioners under the PM Vaya Vandana Yojana.
Key Features of PMVVY
The PMVVY scheme offers the following key features:
- Age Limit: The scheme is available to senior citizens aged 60 years and above.
- Pension Rates: The pension rates range from 7.4% to 8% per annum, depending on the mode of payment chosen by the pensioner.
- Policy Term: The policy term for the scheme is 10 years.
- Loan Facility: Policyholders can avail of loans up to 75% of the purchase price of the policy after three policy years.
- Surrender Value: The scheme offers a surrender value, which is payable in case of premature exit from the scheme.
Benefits of PMVVY
PMVVY offers several benefits to senior citizens, including:
One of the key benefits of the PMVVY scheme is that it offers tax benefits under Section 80C of the Income Tax Act, 1961. This makes the scheme an attractive investment option for senior citizens who are looking for financial stability during their golden years. To be eligible for the scheme, the pensioner must be a citizen of India, aged 60 years or above, and must have a minimum purchase price of Rs. 1,50,000 for the scheme. The pensioner must also provide a valid age proof at the time of application.
- Guaranteed Returns: The scheme offers a guaranteed return of 7.4% to 8% per annum (the government decides and revises the rate of return), depending on the mode of payment chosen by the pensioner.
- Maturity Benefit: Upon the completion of the 10-year policy term, the entire amount, which includes both the final pension and the purchase price, will be paid out to the policyholder.
- Regular Income: PMVVY provides pensioners with a regular and stable income during their retirement years.
- Pension Payment: Under the Pradhan Mantri Vaya Vandana Yojana, the pension is paid out at the end of each period based on the chosen frequency (monthly, quarterly, half-yearly, or yearly) for the policy term of 10 years. This feature provides flexibility for pensioners to select a frequency that best suits their needs, allowing them to receive a stable source of income at regular intervals.
- Death Benefit: The beneficiary receives the purchase price if the subscriber passes away during the policy term under PMVVY.
- Tax Benefits: The scheme offers tax benefits under Section 80C of the Income Tax Act, 1961.
- Loan Facility: Policyholders can avail of loans up to 75% of the purchase price of the policy after three policy years.
- Surrender Value: Under PMVVY, premature exit during the policy term is allowed for critical/terminal illness of self or spouse. In such cases, the pensioner can surrender the policy and receive 98% of the purchase price as the surrender value.
- Free Look Period: PMVVY allows policyholders to return the policy within 15 days (30 days if purchased online) from the receipt date, stating the reason for objections. The refunded amount within the free look period is the purchase price deposited by the policyholder after deducting charges for Stamp duty and paid pension, if any.
- Exclusion: There is an exclusion to this policy’s purchase price return. The entire purchase price is payable if a policyholder commits suicide.
Eligibility for PMVVY
To be eligible for the PMVVY scheme, the pensioner must meet the following criteria:
- The pensioner must be a citizen of India.
- The pensioner must be aged 60 years or above.
- The pensioner must have a minimum purchase price of Rs. 1,50,000 for the scheme.
- The pensioner must provide a valid age proof at the time of application.
Documents Required for PMVVY
The following are the requisite documents to subscribe under the PMVVY scheme:
- Aadhaar card
- PAN card
- Proof of age
- Proof of address
- Proof of income
- Bank account passbook
- Passport size photo of the applicant
- Documents indicating that the applicant has retired from employment
How to Apply for PMVVY
To apply for the PMVVY scheme, pensioners can follow the steps outlined below:
- Visit the official website of the Life Insurance Corporation of India (LIC) or visit a LIC branch office.
- Or Go to https://web.umang.gov.in/landing/department/pmvvy.html?_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=wapp
- Fill in the application form and provide all the necessary documents.
- Pay the purchase price for the policy.
- Upon verification of the documents and payment, the policy will be issued to the pensioner.
Application Procedure for PMVVY
There are two ways to subscribe to the PMVVY scheme:
i) Online Procedure:
- Visit the official website of LIC.
- Click on the ‘Buy Online Policies’ option and then on the ‘Click here’ button.
- Choose ‘Pradhan Mantri Vaya Vandana Yojana’ under the ‘Buy Policy Online’ heading.
- Click on the ‘Click to Buy Online’ option.
- Enter your contact details and click on the ‘Proceed’ button.
- Fill out the application form and upload the requested documents.
- Submit the online application and click on the ‘Submit’ button to complete the registration.
ii) Offline Procedure:
- Collect the PMVVY application form from any LIC branch.
- Fill the application form.
- Attach all relevant documents and submit the form to the LIC branch.
- A LIC agent will verify the documents and start the policy.
PM Vaya Vandana Yojana, (Pradhan Mantri Vaya Vandana Yojana)Payment of Purchase Price Under PMVVY
As previously mentioned, the PMVVY scheme details can be obtained by paying a lump sum amount known as the purchase price of the policy. During the 10-year policy term, the policyholder will receive a pension based on the purchase price paid. At the end of the 10-year term, the purchase price will be returned to the policyholder.
The pension will be paid out at the end of each period, depending on the selected pension payment mode: monthly, quarterly, half-yearly or yearly. If the policyholder opts for monthly payments, the pension will commence from the following month of the purchase price payment.
The pension amount for each period (month, quarter, half-year or year) is based on the interest rate applied to the purchase price invested for the 10-year term. The interest rate applied varies based on the selected pension payment mode, as follows:
Mode of Pension PaymentRate of Interest (p.a) for FY 21-22Monthly7.40%Quarterly7.45%Half-Yearly7.52%Yearly7.66%
Mode of Pension Payment Under PMVVY
The PMVVY scheme offers four modes of pension payment - monthly, quarterly, half-yearly, and yearly. The policyholder must choose the mode at the time of subscribing and cannot change it during the policy term.
A unique Aadhaar number validation is required for purchasing the policy. The pension payments will be made through NEFT or Aadhaar enabled payment system, eliminating the need for the pensioner to visit the bank or LIC agent.
Maximum and Minimum Purchase and Pension Price
The pension amount received by a policyholder depends on the purchase price. The minimum purchase price is Rs.1,62,162, for which the policyholder would receive a monthly pension of Rs.1,000 at the specified rate of interest for monthly mode of pension payment, which is 7.40% p.a.
Here's a table that shows the minimum and maximum purchase price, and the corresponding minimum and maximum pension payment against the purchase price for each mode:
Mode of PaymentMinimum Purchase PriceMaximum Purchase PriceMinimum Pension PaymentMaximum Pension PaymentMonthlyRs.1,62,162Rs.15,00,000Rs.1,000Rs.9,250QuarterlyRs.1,61,074Rs.15,00,000Rs.3,000Rs.27,750Half-YearlyRs.1,59,574Rs.15,00,000Rs.6,000Rs.55,500YearlyRs.1,56,658Rs.15,00,000Rs.12,000Rs.1,11,000
Taxability Provisions of PMVVY
PMVVY is an investment plan that provides senior citizens with a regular pension payment based on their investment frequency. Any returns earned from this scheme are subject to applicable tax rates, and there are no income tax rebates or deductions available under Section 80C of the Income Tax Act. It's important to note that PMVVY is exempt from GST.
How to Check PMVVY Policy Details
To check your Pradhan Mantri Vaya Vandana Yojana policy details, follow these steps:
- Visit the Umang PMVVY webpage.
- Scroll down to find the ‘Policy Basic Details’ heading and click on the ‘Open’ button below it.
- On the next page, choose to ‘Login with MPIN’ or ‘Login with OTP’ option.
- Enter your mobile number, MPIN/OTP, and click on the ‘Login’ button.
- Under the ‘General Services’ heading, click on the ‘Policy Basic Details’ button.
- Enter your ‘Policy Number’, ‘Mobile Number’ and click on the ‘View Details’ button.
- The policy details will be displayed on the screen.
By following these simple steps, you can easily access your policy details and stay updated on your PMVVY scheme.
Applying for the PMVVY scheme is a straightforward process. Pensioners can visit the official website of the LIC or visit a LIC branch office to fill in the application form and provide all the necessary documents. Upon verification of the documents and payment, the policy will be issued to the pensioner.
Contact Details of the PMVVY Policy
For any queries related to the policy, you can contact the following numbers: 022-67819281 or 022-67819290. These numbers are available from Monday to Friday between 10 a.m to 5:30 p.m. Alternatively, you can email your queries to onlinedmc@licindia.com.
PMVVY is an excellent investment option for senior citizens who want a regular pension. However, it requires a substantial lump sum investment.
Conclusion
The PMVVY scheme is an excellent option for senior citizens who are looking for financial stability during their golden years. With guaranteed returns and tax benefits, the scheme provides pensioners with a regular income and ensures that they can lead a dignified life during their retirement years. We hope that this article has provided you with comprehensive information about the PMVVY scheme and has helped you in your goal
FAQ
Q. What is PMVVY and how does it work?
Answer: "Are you a senior citizen looking for a stable source of income? Check out PMVVY - the government-backed investment plan that provides a guaranteed pension for 10 years!"Q. Who is eligible to invest in PMVVY?
Answer: "Calling all senior citizens! Want to secure your financial future? PMVVY is exclusively designed for you - with no maximum age limit and hassle-free investment process."Q. How much pension can I receive under PMVVY?
Answer: "Curious about your potential earnings with PMVVY? Get ready to be amazed - with a minimum investment of Rs.1,62,162, you can earn a monthly pension of Rs.1,000 for 10 years!"Q. What are the different modes of pension payment available under PM Vaya Vandana Yojana?
Answer: "Want flexibility in your pension payments? PM Vaya Vandana Yojana has got you covered - choose from monthly, quarterly, half-yearly, or yearly modes of payment depending on your preference!"Q. Can I surrender my PMVVY policy and get a refund?
Answer: "Worried about locking in your investment? Don't be - PMVVY offers a 15-day free look period (30 days for online purchases) where you can return the policy and receive a refund!"Q. Are there any tax benefits associated with PM Vaya Vandana Yojana?
Answer: "Looking to save on taxes? While PM Vaya Vandana Yojana may not offer tax rebates or deductions, it's still a great investment option for senior citizens who want to earn a stable pension without worrying about GST!"Q. How can a policyholder check their policy status?
Answer: A policyholder can check their policy status by logging onto the official website of LIC or by contacting the customer service team.Q. What is the minimum and maximum policy term for PMVVY?
Answer: The policy term for PMVVY is fixed at 10 years and cannot be changed.Q. Can the mode of pension payment be changed during the policy term?
Answer: No, the mode of pension payment cannot be changed during the policy term.Q. Is it mandatory to have an Aadhaar card to apply for PMVVY?
Answer: Yes, it is mandatory to have an Aadhaar card to apply for PMVVY.Q. Can a policyholder surrender the policy before the completion of the policy term?
Answer: Yes, a policyholder can surrender the policy before the completion of the policy term. However, surrender value will be paid only after the completion of three policy years.Q. What happens if a policyholder dies during the policy term?
Answer: If a policyholder dies during the policy term, the purchase price will be refunded to the nominee or legal heirs of the policyholder.Q. What is the maximum purchase price for PMVVY?
Answer: The maximum purchase price for PMVVY is Rs. 15 lakh.Are you a senior citizen looking for a guaranteed monthly pension?
Check out PMVVY now!"Want to know how to invest in PMVVY and get tax-free returns?
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Here's what you need to knowConfused about the tax implications of PMVVY?
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