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Pradhan Mantri Vaya Vandana Yojana (PMVVY): Benefits, Eligibility & How to Apply

Team AckoAug 23, 2024

Pradhan Mantri Vaya Vandana Yojana (PMVVY)is specifically designed for senior citizens to provide them with a stable income during their retirement years. In this article, we will explore the various aspects of the Pradhan Mantri Vaya Vandana Yojana, its benefits, eligibility criteria, and how you can enrol in the scheme.

Contents

What is Pradhan Mantri Vaya Vandana Yojana?

Pradhan Mantri Vaya Vandana Yojana, is also known as PMVVY. It is a pension scheme exclusively available for senior citizens. The scheme is administered by the Life Insurance Corporation of India (LIC) for the Government of India. PMVVY provides a regular pension payout to the policyholder for a period of 10 years. The scheme offers attractive features such as a guaranteed pension, high rate of return, and flexibility in the payout options. It aims to provide financial security and stability to senior citizens during their post-retirement phase.

Eligibility Criteria

To be eligible for the Pradhan Mantri Vaya Vandana Yojana, individuals need to fulfil the following criteria:

Age: The minimum age to apply for the scheme is 60 years or above.

Nationality: The scheme is available to Indian citizens as well as Non-Resident Indians (NRIs).

Investment Amount: The minimum investment amount is Rs. 1.5 lakh, which provides a monthly pension of Rs. 1,000. The maximum investment amount is Rs. 15 lakhs, which provides a monthly pension of Rs. 10,000.

Benefits of Pradhan Mantri Vaya Vandana Yojana

The Pradhan Mantri Vaya Vandana Yojana offers several benefits to senior citizens. Let's explore them in detail:

Guaranteed Pension: Under the PMVVY, policyholders receive a guaranteed pension payout for a period of 10 years. The pension amount is paid on a monthly, quarterly, half-yearly, or annual basis, as chosen by the policyholder. This ensures a regular and stable income stream during the retirement years.

High Rate of Return: PMVVY offers an attractive rate of return on the investment made. The scheme provides a fixed interest rate, which is announced by the Government of India for each financial year. The current interest rate for PMVVY is 7.4% per annum, payable monthly. The interest is added to the pension amount and paid to the policyholder.

Flexibility in Payout Options: Policyholders have the flexibility to choose the frequency of their pension payouts. They can opt for monthly, quarterly, half-yearly, or annual payouts, depending on their financial requirements. This flexibility allows senior citizens to manage their expenses efficiently.

Death Benefit: In the unfortunate event of the demise of the policyholder during the policy term, the purchase price of the scheme is refunded to the nominee or legal heirs. This ensures that the investment made is not lost and provides financial security to the family members.

Loan Facility: PMVVY offers a loan facility to policyholders after completion of three policy years. Policyholders can avail a loan of up to 75% of the purchase price of the policy. This loan amount can be utilised to meet any urgent financial needs or medical expenses.

Tax Benefits: The Pradhan Mantri Vaya Vandana Yojana offers tax benefits to the policyholders. The premium paid towards the scheme is eligible for deduction under Section 80C of the Income Tax Act, 1961, subject to the overall limit of Rs. 1.5 lakh. However, the pension received is taxable as per the prevailing income tax laws.

Application process for the loan facility against PMVVY

To avail the loan facility against Pradhan Mantri Vaya Vandana Yojana, policyholders need to follow a simple application process. Here are the steps to apply for the loan facility:

Contact the insurance provider: Get in touch with the insurance company or the agent who sold the policy to inquire about the loan facility and express your interest in availing it.

Submit the necessary documents: The insurance provider will require specific documents, such as identity proof, policy details, and loan application form. Ensure you have these documents readily available.

Loan processing: After submitting the required documents, the insurance provider will initiate the loan processing. They will assess the surrender value of the policy and determine the maximum loan amount you can avail.

Loan disbursement: Once the loan application is approved, the insurance provider will disburse the loan amount directly to your bank account. You can use the funds as per your requirements.

Interest rates and repayment terms

The loan facility against Pradhan Mantri Vaya Vandana Yojana comes with competitive interest rates, which vary depending on the insurance provider. It is advisable to review and compare the interest rates offered by different companies before finalising your decision. Repayment terms for the loan are typically flexible, allowing senior citizens to repay the loan in instalments or through policy surrender.

Benefits of the Loan Facility

The loan facility against Pradhan Mantri Vaya Vandana Yojana offers numerous benefits to senior citizens. Some of the key advantages include:

Financial security: The loan facility provides a safety net for unexpected expenses, ensuring financial stability for senior citizens.

Avoiding premature policy surrender: By availing the loan facility, individuals can meet their financial requirements without having to surrender their policy prematurely.

Competitive interest rates: The loan facility offers attractive interest rates, making it an affordable borrowing option for senior citizens.

Flexibility in repayment: Policyholders have the flexibility to choose the repayment mode, either in instalments or through policy surrender, based on their financial situation.

How to enrol in Pradhan Mantri Vaya Vandana Yojana

Enrolling in the Pradhan Mantri Vaya Vandana Yojana is a simple and hassle-free process. Here are the steps to follow:

Visit the nearest branch of the Life Insurance Corporation of India (LIC).

Collect the Pradhan Mantri Vaya Vandana Yojana application form.

Fill in the necessary details in the form, such as personal information, investment amount, and choice of pension payout frequency.

Submit the completed application form along with the required documents, such as age proof, address proof, and identity proof.

Make the investment payment through cash, demand draft, or online transfer as per the instructions provided by LIC.

Once the application is processed and approved, the policy documents will be issued to the policyholder.

Application Process for the PMVVY Scheme

Offline Method

You can acquire the Pradhan Mantri Vaya Vandana Yojana (PMVVY) through both offline and online channels, offered by the Life Insurance Corporation of India (LIC).

For the offline method:

1. Visit your nearest or preferred LIC branch.

2. Decide on the purchase price or pension amount you want.

3. Complete the application form.

4. Submit the application along with the necessary documents and your chosen payment.

Online Method

For a convenient application process, you can apply for PMVVY online by following these steps.

For the online method

Visit the official website of the Life Insurance Corporation of India.

Locate the "Buy Policy Online" section and click on the "Pradhan Mantri Vaya Vandana Yojana" option.

A new tab will open with four options. Click on button number 842 for the 'Buy Online' option. You'll be directed to a new page where you should select 'Click to Buy Online' located in the left corner.

Create an Access ID to proceed. Provide your name, email ID, mobile number, date of birth, address, and servicing unit. You'll receive a 9-digit Access ID through SMS or email to your registered mobile number or email address.

Submit the Access ID and click 'Proceed' to continue with your application.

Finally, choose your preferred pension plan under Pradhan Mantri Vaya Vandana Yojana, complete the application form, upload scanned copies of the required documents, and make the payment. After successfully submitting the application, you'll receive an acknowledgment along with your policy number.

Required Documents to apply for PMVVY:

Aadhaar Card

PAN Card

Details of bank where the money must be pensioned

Purchase Price payment

Individuals have the option to purchase the scheme by making a single lump-sum payment. The pensioner can decide between selecting the purchase price or specifying the pension amount they wish to receive. The table below outlines the minimum and maximum pension amounts available under various modes:

Pension mode	Minimum Purchase Price(₹)	Maximum Purchase Price(₹)
Monthly	1,50,000	15,00,000
Quarterly	1,49,068	14,90,683
Half-yearly	1,47,601	14,76,015
Yearly	1,44,578	14,45,783

Pension Payment Modes

You can select from different payment modes for receiving your pension: monthly, quarterly, half-yearly, or annually. Your pension must be transferred using the Aadhaar Enabled Payment System or National Electronics Fund Transfer (NEFT).

The first pension payment should be made within one month, three months, six months, or one year from the date of policy purchase, depending on your chosen payment frequency.

Taxation of the PMVVY Scheme

Statutory Taxes imposed by the Indian Government or other constitutional tax authorities will be in accordance with applicable tax laws and rates. These taxes will not be considered when calculating the benefits payable under the PMVVY scheme.

Pension Rates under the PMVVY Scheme

Here are the pension rates for a Purchase Price of Rs. 1,000 under various pension payment modes:

Monthly: Rs. 80 per annum.

Quarterly: Rs. 80.50 per annum.

Half-yearly: Rs. 81.30 per annum.

Yearly: Rs. 83 per annum.

These rates are independent of the policyholder's age, and pension payments will be rounded to the nearest rupee.

Exclusion of PMVVY

If the policyholder commits suicide, the full purchase price is payable, and there is no exclusion.

Fraudulent Activities under the PMVVY Scheme

LIC will inform the policyholder of any policy-related fraud within three years from:

The policy issuance date.

The date when the risks started.

The policy revival date.

The date when a rider was added to the policy, whichever is later.

How to check your PMVVY policy details?

Follow these steps:

1. Visit the Umang PMVVY webpage.

2. Scroll down and click "Open" under "Policy Basic Details."

3. Choose "Login with MPIN" or "Login with OTP."

4. Enter your mobile number, MPIN/OTP, and click "Login."

5. Click "Policy Basic Details" under "General Services."

6. Input your "Policy Number" and "Mobile Number," then click "View Details."

7. Your policy details will appear on the screen.

Contact Details for PMVVY:

02267819281, 1800227717

[email protected]

https://www.licindia.in/

Conclusion

In conclusion, the Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a government-backed pension scheme designed to provide financial security to senior citizens. Under this scheme, individuals above the age of 60 can invest a lump sum amount to receive regular pension payouts. PMVVY offers a guaranteed interest rate and a pension payment option, making it an attractive choice for retirees seeking a stable source of income.

To check policy details or participate in PMVVY, individuals can easily access the scheme through the Umang app, ensuring an easy and secure retirement planning experience. With its reliability, PMVVY stands as a valuable initiative to empower India's elderly population with financial stability during their golden years.

Wrapping up

Pradhan Mantri Vaya Vandana Yojana is a beneficial pension scheme for senior citizens, providing them with financial security and stability during their retirement years. The scheme offers guaranteed pension, high rate of return, flexible payout options, and tax benefits. By enrolling in PMVVY, senior citizens can secure a regular income stream and enjoy a worry-free retirement.

Frequently Asked Questions (FAQs)

Here are some common questions about Pradhan Mantri Vaya Vandana Yojana.

What is the maximum investment amount allowed under PMVVY?

The maximum investment amount allowed under Pradhan Mantri Vaya Vandana Yojana is Rs. 15 lakhs.

Can NRIs (Non-Resident Indians) invest in PMVVY?

Yes, NRIs are eligible to invest in the Pradhan Mantri Vaya Vandana Yojana.

What happens if the policyholder passes away during the policy term?

In the event of the demise of the policyholder during the policy term, the purchase price of the scheme is refunded to the nominee or legal heirs.

Can policyholders avail a loan against their PMVVY policy?

Yes, policyholders can avail a loan facility against their PMVVY policy after completion of three policy years.

Is there any minimum investment amount for PMVVY?

The minimum investment amount for Pradhan Mantri Vaya Vandana Yojana is Rs. 1.5 lakh.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.