Our Government of India launched several schemes for the benefit of the people of India now and then. Some examples are PPF (Public Provident Fund), Atal Pension Yojana, National Pension Scheme, Senior Citizens Saving Scheme, and many more to add to the list. These above-mentioned schemes are popular among those people who are planning their retirements and one of the new addition to this list is Pradhan Mantri Vaya Vandana Yojana (PMVVY).
PMVVY is operated and managed by Life Insurance Policy of India (LIC), which is the largest life insurance provider in India, this scheme is a retirement and pension scheme.
What is Pradhan Mantri Vaya Vandana Yojana?
Pradhan Mantri Vaya Vandana Yojana (PMVVY) was launched in 2017 in the month of May as a retirement and pension scheme. As per this scheme, the purchaser of the scheme invests money which is called the purchase price. The authority guarantees back the scheme, it offers a fixed and assured rate of return on the investment made by the investor.
This scheme provides a regular pension and the duration can monthly, quarterly or yearly. PMVVY scheme is a very good alternative to the regular bank deposits which most people opt for.
PMVVY scheme was launched after the success and popularity of Varishtha Pension Bima Yojana 2003 (VPBY-2003) and Varishtha Pension Bima Yojana 2014 (VPBY-2014) scheme to protect elderly people aged 60 years and above, from a future fall in their interest income as the market conditions are not very well and certain, as also to provide social security in the old age so that they do not have to be dependent for their financial requirements government decide to launch a simplified scheme of assured pension of 8% called ‘प्रधानमंत्रीवयवन्दनायोजना’. As per this scheme, if you pay a minimum purchase price of rupees 1,50,000/- for a minimum pension of rupees 1000/- per month or a maximum purchase price of rupees 7,50,000/- for a minimum pension price of rupees 5000/- per month, subscribers will get an assured pension based on a guaranteed rate of return of 8% per annum, which will be payable monthly.
Pradhan Mantri Vaya Vandana Yojana Launch Date
This scheme was launched in May 2017 and it will provide an assured pension of 7.40% per annum per month up to 31st March 2021. This PMVVY scheme was bought online by the LIC website and offline too. Now the date has been extended for this scheme to end, it became 31st March 2023.
Benefits of Pradhan Mantri Vaya Vandana Yojana
The following are the main benefits of subscribing to the PMVVY scheme:
- This scheme provides an assured rate of return which is 8% to 8.3% for 10 years.
- PMVVY will provide its subscribers a regularity of fixed amount which can not be changed.
- The entire amount of the scheme (including the final pension and the purchase price) will be paid once the policy term of 10 years will be completed.
- The loan is also available on this scheme for emergencies, a loan of up to 75% of the purchase price is available but after 3 years.
- If any medical emergency occurs, in that case, the subscribers can withdraw 98% of the purchase price.
- If due to any miss happening the subscriber passes away within the term of the policy, in that case, the nominee would be paid out with the purchase price.
- If we talk about the Tax benefits of this scheme we can say that a senior citizen who is purchasing PMVVY is eligible to claim a deduction of INR 1,50,000 over the deposit amount under the section of 80C. However, the interest amount which is received is taxed as per the respective tax slabs which apply to taxpayers.
Eligibility for PMVVY
There are no such specific eligibility criteria for the PMVVY scheme except for one that is the subscriber must be a senior citizen (above the age of 60 years). And one of the basic conditions that the subscriber must be an Indian citizen. There is no maximum entry age is mentioned to apply for the PMVVY scheme it’s just that the applicant must be ready to avail of the policy terms for 10 years.
Documents Required for PMVVY
Of course, you need some documents for identification and also to meet the requirements of the scheme, and the list of these documents required are given below:
- Aadhaar Card
- Proof of age
- Proof of address
- Passport size photos of the applicant
- Documents showing that the applicant has retired from whatever occupation he/she was.
Application Procedure for PMVVY
There can be two different ways to apply for the scheme and those are :
1. Online procedure for this online procedure you need to follow some steps –
- Visit the official website of LIC.
- Look for the products and under that select ‘pension plans’ and proceed.
- Next is to fill the application form showing on the screen.
- After the form is filled, submit the form and upload the documents which are being requested to upload.
2. Offline procedure for this offline procedure also you need to follow some steps which are –
- Collect the application form from the LIC office, you can reach the nearest LIC branch as it is available on each one of them.
- Fill the application form completely and carefully.
- Submit this form again to any LIC branch and also attach all the documents required.
Pension Policy for PMVVY
As mentioned above the minimum purchase price for the pension policy is rupees 1,50,000, for rupees 1000 as a monthly pension. Just like this above purchase price and pension, all of the received pensions by subscribers will depend on the purchase price.
Table of Pension Policy for minimum amount of pension and investment –
|Pension Policy||The minimum amount|
|The minimum amount|
Table of Pension Policy for maximum amount of pension and investment –
|Pension Policy||The maximum amount|
|The maximum amount|
PMVVY scheme is a great option to invest for senior citizens, those senior citizens who are looking for a regular pension can consider this scheme as the solution to their hunt. However, one should have a good amount in hand for investing in this scheme.
Advantages and Disadvantages
- When we talk about any policy or scheme there are always some pros as well as some cons too, likewise, with the advantages, there are some disadvantages as well. When we talk about the advantages of this scheme we can say that the PMVVY scheme provides moderate interest as well as there is no risk factor related to any of the scheme’s aspects, so this scheme is suitable for senior citizens looking for risk-free products.
- Whereas when we talk about the disadvantages of the PMVVY scheme, the very first is that this scheme has an age boundary which means it is available for people above 60 years and not any less of it, secondly this scheme has a lock-in period of 10 years, the third point is that it has a maximum pension up to 10,000. One more point to consider is that it doesn’t have a tax-free interest.
Form of PMVVY Scheme given by LIC
The form of PMVVY scheme is 11 pages, these pages consist of all the information about the scheme let us discuss one by one, also this form has parts like part A, part B, part C, let’s find out what they show:
- Page 1 requires name and address of policyholder, address and email I’d of branch holder, policy number, address for Grievance Redressal Officer, address and contact details of insurance Ombudsman (in case you have any complaint or query about the policy you can contact these two addresses) also it has agent’s name, agent’s code, and agent’s landline number.
- Page 2 is occupied with some aspects that the insurance company wants to draw your attention to. For example; change of address, submission of life certificate, nomination, assignment, etc.
- Page 3 consists of Preamble.
- On Page 4 they require some details of pensioner, the nominee, and also the beneficiary details.
- On page 5 there are some definitions of the words mentioned in the form. So that the person filling the form should know the meaning of all the words that are not familiar to him/her.
PART-C and PART-D
- Page 6 has benefits of the scheme and also conditions related to service aspects.
- Part E of the form is not applicable.
- This part is on both pages 6 and 7 which consists of other terms and conditions.
- This part is also on pages 7 and 8, now this part has some Statutory Provisions.
- Page 9 has information of Assignment- As per section 38 of Insurance Act, 1938 (Annexure-1).
- Page 10 has information of Nomination- As per Section 39 of Insurance Act, 1938 (Annexure-2).
- At last on page 11 has information about Section 45 As per Insurance Act, 1938 (Annexure-3).
Frequently Asked Questions
Q1. What age criteria does this policy have for application?
Ans. There are no specific age criteria but it says that the applicant should be above 60 years.
Q2. Is there a tax-free interest in this policy?
Ans. No, this PMVVY scheme doesn’t have a tax-free interest.
Q3. Under whose administration does the PMVVY scheme be launched?
Ans. On behalf of the Indian Government, the Life Insurance Policy of India is the administrator of PMVVY.
Q4. What benefits does this PMVVY scheme provide?
Ans. This scheme provides so many benefits but to sum up, to three points they will be :
- Pension benefits: during the policy terms of 10 years if the pensioner survives, pension is payable at the fixed period which is being chosen by the pensioner itself.
- Death benefits: if the pensioner dies during the policy period of 10 years because of any miss happening, the purchase price will be refunded to the beneficiary.
- Maturity benefits: when the scheme matures and if the pensioner survives till then, the purchase price, as well as final pension installment, will be given to the pensioner.
Q5. What are the minimum and maximum pensions available under this scheme?
Ans. The minimum and maximum pensions are:
|Mode of pension||Monthly||Quarterly||Half-yearly||Yearly|
Q6. Will there be any changes in the scheme if the application form is filled in online mode?
Ans. Whether you fill the application form online or offline, it doesn’t change even a single line of the policy terms in any way. It is all same online and offline, both the ways.
Q7. Is it important to go through the complete form during applying for this PMVVY scheme?
Ans. It’s better to go through the complete form for everything that you are applying for, as to have all the information about what benefits you will get, what terms and conditions you will have to face, and all other kinds of information so that you do not face any problem regarding the scheme in the future.