PM Vaya Vandana Yojana (PMVVY) For Senior Citizens : Eligibility, Benefits & Other Details

Planning for a financially secure future is extremely important, especially during such unpredictable times. Having an assured income in the form of pension or annuity is a great way of staying financially independent even after retirement.

Therefore, the Government of India launched a retirement cum pension scheme for senior citizens in May 2017 – Pradhan Mantri Vaya Vandana Yojana. Initially, this scheme was available for investment until 31^st March, 2020.

However, the PM Vaya Vandana Yojana was recently extended for another three financial years i.e. until March 2023. In order to ensure social security and financial independence after retirement, the scheme offers an assured rate of return on your investment.

Offered only by LIC (Life Insurance Corporation of India), the PMVVY pension scheme provides an assured return for 10 years. Also, in its 2018-19 Budget Speech, the Government increased the maximum purchase price to ₹15 lakh.

So, let us look at the PM Vaya Vandana Yojana for Senior Citizens along with its eligibility, benefits and other details.

• How does the PM Vaya Vandana Yojana work?

As mentioned earlier, the Government launched the PMVVY pension scheme to protect senior citizens from unpredictable market conditions and to provide them with a certain level of financial security.

So, the PMVVY offers a guaranteed payout of pension at a specified rate for a period of 10 years. For FY 2020-21, the PMVVY pension scheme will offer assured return at 7.40% per annum.

Also, for investments made in the following two Financial Years i.e. FY 2021-22 and FY 2022-23, the interest rate will be declared by the Government at the start of that particular financial year. This annual reset of the assured interest rate will be effective from 1^st April of each financial year.

• PMVVY Eligibility

In order to be eligible to invest in the PMVVY pension scheme, the applicant must be an Indian citizen and must be above 60 years of age. Also, he/she should be ready to avail the policy term of 10 years.

• Important features of PMVVY pension scheme

The PM Vaya Vandana Yojana offers guaranteed returns by different modes of payout i.e. monthly, quarterly, half-yearly or yearly. You can choose your preferred mode according to the pension amount you wish to receive.

• Monthly – Under this mode, you will a receive a particular pension amount on a monthly basis.
• Quarterly – Here, you will receive your pension amount once every three months or 4 times a year.
• Half-yearly – You will receive pension amount on a half-yearly basis i.e. once every six months.
• Yearly – Under this mode, you will receive your pension amount once in a year.

The maximum purchase price or investment in PMVVY pension scheme has been restricted to ₹15 lakh per senior citizen.

Here, the table shows the minimum and maximum purchase price for each pension mode.

So, according to the purchase price you choose, the following table shows the minimum and maximum pension amount that you can receive.

• Benefits of PM Vaya Vandana Yojana

One of the most important benefits of the PMVVY pension scheme is that it offers an assured return at a fixed interest rate. The interest rate is 7.40% for FY 2020-21.

The Pradhan Mantri Vaya Vandana Yojana interest rate will be reset on 1^st April for the next two financial years i.e. FY 2021-22 and FY 2022-23. Apart from reset of interest rates at the start of each financial year, there are various other important PMVVY details that will benefit the applicants.

Some of the benefits of PMVVY pension scheme include:

Maturity benefit – If the policyholder survives until the end of the policy term of 10 years, then the initial purchase price along with the final pension installment will be payable to the policyholder.

Death benefit – Under the PM Vaya Vandana Yojana, if the pensioner dies within the policy term of 10 years, then the initial purchase price of the scheme will be refunded to the beneficiary.

Payment modes – As mentioned earlier, the pensioner can opt for monthly, quarterly, half-yearly or yearly payment options. Also, depending on the chosen mode, the first pension payment will be done immediately after the payment of purchase price. So, if you opt for the quarterly mode, you would receive your first PMVVY pension scheme payment within 3 months of the date of policy purchase.

Surrender value – The LIC PMVVY allows for pre-mature withdrawal in case of treatment for critical illness of self/spouse. The pensioner can receive 98% of the purchase price in case of pre-mature exit from PMVVY pension scheme.

• Loan benefit – Under the PMVVY pension scheme, the policyholder can avail for a loan after completing 3 years of the policy. The maximum loan granted will be around 75% of the initial purchase price.

• Application Procedure for PM Vaya Vandana Yojana

The Government of India has given LIC the sole privilege to operate this scheme. So, LIC offers online and offline modes of application for the PMVVY pension scheme.

How to apply for PMVVY online?

You can easily apply for the PMVVY pension scheme online by following the given steps:

Step 1: Go to https://licindia.in/

Step 2: Under Buy Policy Online, click on Pradhan Mantri Vaya Vandana Yojana.

Step 3: In the new tab, click on the given Button no. 856 for Buy Online option. Again, in the new page, select the Click to Buy Online option.

Step 4: Now, fill the given PMVVY application form and submit it along with the required documents.

You can also apply for the PM Vaya Vandana Yojana through offline mode. For this, you just need to visit your nearest LIC branch and choose your preferred purchase price or pension payment.

Fill up the PMVVY form and submit the required documents.

• Documents Required for PMVVY pension scheme

Once you understand the PMVVY scheme details and fill up the application form, you need to submit the following documents along with it.

• Proof of age
• Aadhaar card
• Proof of address
• Passport size photo of applicant
• Documents indicating that applicant has retired from employment

• Tax Benefits on LIC’s Pradhan Mantri Vaya Vandana Yojana

Apart from the various benefits offered under the PMVVY pension scheme, you can also avail tax exemptions under section 80C of up to Rs. 1.5 lakh on the initial purchase price.

However, the pension amount or returns that you receive, will be taxable as per the Income Tax laws.

So, here were some important details about the PM Vaya Vandana Yojana. Designed to benefit senior citizens after retirement, the PMVVY pension scheme offers guaranteed returns on investment at fixed interest rates.

Apart from the PM Vaya Vandana Yojana, here are 10 Government Schemes launched for the benefit of senior citizens.