Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a non-linked, non-participating, pension plan by the Government of India. This plan is exclusively for senior citizens of age 60 years and above.
|Plan Name||Pradhan Mantri Vaya Vandana Yojana (PMVVY)|
|Plan Type||Pension Plan|
|Launch Date||26 May 2020|
List of Topic Covered
Key Features of Pradhan Mantri Vaya Vandana Yojana
- PMVVY is a retirement cum pension plan subsidized by the Government of India.
- It provides a guaranteed pension of 7.4% per annum with a pension frequency of monthly, quarterly or yearly.
- LIC has been given sole right to operate the PMVVY scheme.
- This scheme is available up to 31st March 2023.
- This scheme can be purchased offline as well as online.
- Loan facility is available under PMVVY.
- Pradhan Mantri Vaya Vandana Yojana provides tax benefits as well.
Pradhan Mantri Vaya Vandana Yojana (PMVVY) Benefits
- Pension Payment in PMVYY
- Once a policyholder (Pensioner) pays the purchase price, he starts getting pension at the rate fixed by the corporation on a monthly, quarterly, half-yearly or yearly basis.
- Death Benefit in PMVYY
- On death of the pensioner at any time during the policy term of 10 years, the purchase price shall be refunded to the nominee.
- Maturity Benefit in PMVYY
- If a pensioner survives till the end of the policy term of 10 years, purchase price along with the final pension installment shall be payable to the pensioner.
Eligibility conditions and other restrictions in Pradhan Mantri Vaya Vandana Yojana Policy
|Purchase Price||₹ 1,62,162/- monthly|
₹ 1,61,074/- quarterly
₹ 1,59,574/- half-yearly
₹ 1,56,658/- yearly
|₹ 15,00,000/- monthly|
₹ 14,89,933/- quarterly
₹ 14,76,064/- half-yearly
₹ 14,49,086/- yearly
|Pension Amount||₹ 1,000/- per month|
₹ 3,000/- per quarter
₹ 6,000/- per half-year
₹ 12,000/- per year
|₹ 9,250/- per month|
₹ 27,750/- per quarter
₹ 55,500/- per half-year
₹ 1,11,000/- per year
|Purchase Price||₹ 1,56,658 /-||₹ 15,00,000 /-|
|Policy Term||10 years||10 years|
|Entry Age||60 years (Completed)||No limit|
How Pradhan Mantri Vaya Vandana Yojana Works with Example
Let’s look at the working of the plan in detail.
Suppose Ram with 60 years of age takes this plan with following details :
Age – 60
Policy Term – 10 years
Purchase Price – 10 Lakhs
Pension Payment Mode – yearly
Yearly pension rate is 7.66 %
Therefore Ram will receive the yearly pension of Rs. 76,600/- for 10 years.
Scenario 1 – If Ram dies after 5 years of taking the plan.
So for five years Ram had received Rs. 76,600 x 5 = Rs. 3,83,000 /-
After Ram’s death his nominee will receive the Purchase price i.e 10 Lakhs back and the policy will close.
Scenario 2 – If Ram survives the entire policy term of 10 years.
So in this case for 9 years Ram had received the pension amount = 9 x Rs. 76,600 = Rs. 6,89,400 /-
& in the 10th year Ram will receive the Purchase Price + Last year’s pension amount = Rs. 10,00,000 + Rs. 76,600 = Rs. 10,76,600/-
Mode of pension payment in PMVVY
Pension will be paid yearly, half-yearly, quarterly or monthly as per the mode selected by pensioner at the time of purchasing the plan.
Surrender Value in Pradhan Mantri Vaya Vandana Yojana
Under this scheme a pensioner can exit only in exceptional cases like he needs money for treatment of any critical/terminal illness of self or spouse. Surrender value paid in such cases will be 98% of the purchase price.
Loan Facility in Pradhan Mantri Vaya Vandana plan
Loan facility is available only after you complete 3 policy years in the plan. The maximum loan granted will be 75% of the purchase price.
Tax Benefit in Pradhan Mantri Vaya Vandana Yojana
- Investment made into PMVVY is exempt from tax under section 80CCC of the income tax act of 1961.
- The maximum exemption can be availed is 1.5 Lakhs
- However the pension received by the pensioner will be taxable.
Free Look Period in Pradhan Mantri Vaya Vandana Yojana
If the policyholder is not satisfied with the policy, he or she can return the policy within 15 days (30 days if the policy is purchased online) to the corporation stating the reason for the same.
How to buy Pradhan Mantri Vaya Vandana Yojana
This plan can be bought online as well as offline.
PMVVY can be bought offline through agents or brokers. You can also visit the company’s branch office and buy the plan.
Step by step process to buy Pradhan Mantri Vaya Vandana Yojana Online.
- Log on to www.licindia.in website.
- Click on Buy Policies online.
- Click on Pension heading.
- Then select PMVVY Plan.
- Click on buy online.
- Enter your personal details and an OTP will be sent to your phone.
- After putting OTP, you will be asked a question that,
- Do you have any other policy under this plan and/or under Pradhan Mantri Vaya Vandana Yojana with UIN 512G311V01 OR UIN 512G311V02?
- Then Choose your resident status, purchase option, residence country, pension mode, purchase price, gender.
- After adding all these details, a premium calculator will calculate the annuity amount for the selected parameters.
- After this enter Name, Address, Occupation, Qualification etc to complete the proposal form online or you can do it with offline e-KYC
- At last pay the purchase price online/offline and fulfil the underwriting requirements if any.
Documents required to buy Pradhan Mantri Vaya Vandana Yojana
- LIC Proposal form, duly filled and signed by the proposer/Policyholder/Pensioner
- Photograph of the Pensioner
- Age proof of the Pensioner
- Identity proof of the proposer/Pensioner
- Address proof of the Pensioner
- PAN card of the proposer
- Cheque on the name of “Life Insurance Corporation of India/LIC of India” towards policy purchase price.
How to make claim in Pradhan Mantri Vaya Vandana Yojana?
How to make Maturity Claim or Surrender in Pradhan Mantri Vaya Vandana Yojana?
When a policy is maturing, the insurance company will usually send intimation to the policyholder along with a discharge voucher at least two to three months in advance of the date of maturity.
Maturity claim is hassle free. You just have to follow some simple steps.
The policyholder has to Fill up and submit Form No. 3825 with some other documents listed below.
- Original LIC Policy Document
- Identity Proof
- Age Proof (if not submitted previously)
- Cancelled Cheque or a copy of the Policy holder’s Bank Passbook
- Assignment/ Reassignment (if any)
- NEFT Mandate Form (to transfer the maturity proceeds directly to the policyholder’s account)
If you are making a surrender claim, you have to inform the company in writing or contact your agent for this.
How to make a Death claim in Pradhan Mantri Vaya Vandana Yojana Plan?
In case of death claim, nominee can get the death benefit by submitting required documents.
Below are the list of documents which nominee has to submit to get the purchase price.
- Claim Form ‘A’ in Form No.3783.
- If policy has run for 3 years or more from date or risk, claim Form No.3783A may be used
- Certified extract from death register issued by hospital/Doctors/District level authorities.
- The original policy document with Deed of assignment
In case you face any issue, contact your agent or visit your respective servicing branch.
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I hope this helps you to understand Pradhan Mantri Vaya Vandana Scheme Plan really well. If you have any question about this pension policy, please comment below and we will get back to you shortly.