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

Team AckoJan 21, 2025

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.

Pradhan

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 10 years. The scheme offers attractive features such as a guaranteed pension, a 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 for PMVVY

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.

Required Documents to Apply for PMVVY:

1. Aadhaar Card
2. PAN Card
3. Address proof
4. Age proof
5. Proof of income
6. Proof of retirement
7. Bank account details

How to Enrol in PMVVY

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.

Benefits of PMVVY

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 10 years. The pension amount is paid monthly, quarterly, half-yearly, or annually, 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 onthe 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 can 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 policyholder's demise during the policy term, the purchase price of the scheme is refunded to the nominee or legal heirs. This ensures that the investment is not lost and provides financial security to the family members.

Loan Facility:
PMVVY offers a loan facility to policyholders after the completion of three policy years. Policyholders can avail themselves of a loan of up to 75% of the policy's purchase price. This loan can be utilised to meet 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 per the prevailing income tax laws.

How to Apply for PMVVY

You can acquire the Pradhan Mantri Vaya Vandana Yojana (PMVVY) through 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.

Visit the official website of the Life Insurance Corporation of India.
Locate the "Buy Policy Online" section and click 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', which is 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 acknowledgement along with your policy number.

Benefits of the Loan Facility Under PMVVY

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 opting for the loan facility, individuals can meet their financial requirements without prematurely surrendering their policy.
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.

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

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).

Challenges and Limitations of PMVVY

While PMVVY offers guaranteed returns and a government-backed pension, it does have several challenges and limitations:

1. Limited Tenure of 10 Years	PMVVY provides a guaranteed pension for only 10 years, after which the payments stop. This may not be ideal for those seeking lifelong income. If the policyholder passes away before 10 years, the nominee can claim the invested amount, but this may not offer long-term security.
2. Interest Rate Fluctuations	The interest rate for PMVVY is fixed for each policy but subject to annual revisions. If interest rates fall, new investors may receive lower returns than those who invested during higher-rate periods, affecting long-term predictability.
3. Investment Cap and Premium Restrictions	The maximum investment under PMVVY is Rs. 15 lakh per senior citizen, which may be limiting for those with larger savings. Additionally, the cap applies to individual accounts, not joint accounts, restricting investment for couples.
4. Inflation Risk	The fixed returns do not adjust for inflation, meaning the purchasing power of the pension may decrease over time, impacting seniors' ability to meet rising living costs.
5. No Liquidity or Early Withdrawal Options	PMVVY has no early withdrawal options except in case of the policyholder’s death. This lack of liquidity can be problematic if unforeseen financial needs arise during the policy term.
6. Not Suitable for Younger Retirees	The 10-year term makes PMVVY less suitable for younger retirees (early 60s) who may require a longer-term investment option with inflation-adjusted returns, such as annuity plans or equity-based investments.

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.

Important Points to Remember:

Pension Payment Modes: The first pension is paid within one month, three months, six months, or one year from the policy purchase, depending on the payment frequency you selected.
Taxation of the PMVVY Scheme: Taxes on the Pradhan Mantri Vaya Vandana Yojana (PMVVY) will be levied according to the prevailing tax laws set by the Indian Government or relevant tax authorities. These taxes will not be factored into the benefits or returns under the scheme.
If the policyholder commits suicide, the full purchase price is payable, and there is no exclusion.
Interest Rate & Returns: The 7% to 8% return is related to the pension scheme you invest in under PMVVY. The loan facility comes with its own interest rate, which is separate from the pension return rate.
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. 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

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.

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.

Managing Healthcare Costs and Future Financial Needs

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) offers a stable post-retirement income, helping senior citizens manage their financial needs effectively. Rising healthcare costs also highlight the importance of a health insurance policy.

Health insurance protects your savings by covering medical expenses, ensuring you can access quality healthcare without financial strain. While it safeguards against immediate medical costs, planning for long-term financial security is equally vital. This is where term insurance comes into play.

A 1 crore term insurance policy provides extensive coverage for your family’s future. Using a term insurance premium calculator, you can identify a plan that aligns with your financial goals.

Alternatively, you can buy life insurance online for broader financial planning tailored to your needs.