Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a pension scheme launched by the Government of India in 2017. The scheme provides a guaranteed pension to senior citizens aged 60 years and above. The scheme is administered by the Life Insurance Corporation of India (LIC).
The PMVVY is a government-backed scheme, and the pension payments are guaranteed by the government. The scheme aims to provide financial security to senior citizens and helps them meet their post-retirement expenses.
The government notifies the time period of the availability of the scheme. Currently, the scheme is available up to March 31, 2023.
The differential return, i.e. the difference between the return generated by LIC and the assured return per annum is borne by Government of India as subsidy on an annual basis.
Pension is payable at the end of each period during the policy tenure of 10 years as per the frequency of monthly/quarterly/ half-yearly/yearly as chosen by the subscriber at the time of purchase.
In 2018, the Union Cabinet chaired by Prime Minister Narendra Modi had given its approval for extending the investment limit from Rs 7.5 lakhs to Rs 15 lakhs.
The minimum investment was also revised to Rs.1,56,658 for pension of Rs.12,000 per annum and Rs.1,62,162/- for getting a minimum pension amount of Rs.1000 per month under the scheme.
Under the PMVVY, senior citizens can invest a lump sum amount in the scheme and receive a guaranteed pension for 10 years. The pension rates under the scheme are fixed and range from 7.40% to 7.66% per annum, depending on the mode of pension payment chosen (monthly, quarterly (7.45%), half-yearly (7.52%) or yearly).
LIC’s Pradhan Mantri Vaya Vandana Yojana: Features
- No medical examination is required.
- Premature exit is allowed during policy term under exceptional circumstances like Critical/Terminal illness of self or spouse. Surrender Value payable in such cases is 98% of the Purchase Price.
- Loan is available under the policy after completion of 3 policy years. Maximum loan granted will be 75% of the purchase price.
LIC’s Pradhan Mantri Vaya Vandana Yojana: Plan
- The Plan provides immediate pension for senior citizens 60 years and above. It can be purchased by paying a lump sum amount.
- The plan provides for pension payments of stated amount for the policy term of 10 years, with return of purchase price at the end of 10 years.
- Pension payment modes are available: Monthly/quarterly/half-yearly/yearly
- Pension will be paid at the end of each period as per payment mode chosen starts as early as next month if monthly mode is chosen.
- On the death of the pensioner at any time during the term of 10 years, the purchase price will be refunded to the legal heirs/nominees.
- On survival of the pensioner to the end of the policy term of 10 years, purchase price along with final pension installment shall be payable.
- Only resident Indians are eligible to purchase this plan.
Eligibility Conditions and Other Restrictions:
a) Minimum Entry Age : 60 years (completed)
b) Maximum Entry Age : No limit
c) Policy Term : 10 years
d) Minimum Pension : Rs 1,000 per month
Rs 3,000 per quarter
Rs 6,000 per half-year
Rs 12,000 per year
e) Maximum Pension : Rs 9,250 per month
Rs 27,750 per quarter
Rs 55,500 per half-year
Rs 1,11,000 per year
Minimum and maximum Purchase price under different modes of Pension:
Total amount of purchase price under all the policies under this plan allowed to a senior citizen shall not exceed Rs 15 lakhs.
For financial year 2022-23, the scheme is providing an assured pension of 7.40% per annum payable monthly.
The policy can be take offline or through the official website of LIC.
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