Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a Pension Scheme announced by the Government of India exclusively for its senior citizens aged 60 years and over which can be obtained from 4th May, 2017 to 31st March, 2020.
Ceiling of retirement is for a household as a whole i.e. total quantity of pension under all of the policies permitted to a household under this plan will not exceed the maximum pension limit. The household for this purpose will include of pensioner, his/her partner and dependants.
The Scheme can be bought offline in addition to online through Life Insurance Corporation (LIC) of India that has been granted the sole privilege to run this Scheme. To purchase online, see http://www.licindia.in/
Payment of Purchase Price
The scheme can be bought by payment of a lump sum Purchase Price. The pensioner has an option to select either the total amount of pension or the Purchase Price. The maximum and minimum Purchase Price under different modes of retirement will be as under:
Mode of Pension Minimum Purchase Price Maximum Purchase Price
Mode of retirement payment
The manners of retirement payment are quarterly, monthly, half-yearly & annual. The retirement payment shall be via NEFT or Aadhaar Referral Payment Method.
The first instalment of pension shall be paid after 1 year, 6 weeks, 3 weeks or 1 month from the date of purchase of the exact same based on the mode of retirement payment i.e. annual, half-yearly, quarterly or yearly .
Surrender Value
The scheme allows premature departure during the coverage term under unique circumstances like the Pensioner requiring cash for the treatment of any critical/terminal illness of self or partner. The Surrender Value payable in these cases shall be 98% of Purchase Price.
Loan
Loan facility can be obtained after completion of 3 policy years. The maximum loan that may be granted shall be 75 percent of the Purchase Price.
The interest rate to be charged for loan amount shall be set at periodic intervals. For the loan sanctioned in Financial Year 2016-17, the applicable interest rate is 10 percent p.a. payable half-yearly for the whole duration of the loan.
Loan interest will be retrieved from retirement amount payable under the policy. The Loan interest will accrue in accordance with the frequency of retirement payment under the policy and it'll be due on the due date of retirement. However, the loan outstanding will be recovered in the claim proceeds at the time of exit.
Pradhan Mantri Vaya Vandana Yojana (PMVVY) Eligibilty & Benefits
Advantages of the plot- Following are the major benefits under the Pradhan Mantri Vaya Vandana Yojana (PMVVY):
- Scheme provides an assured return of 8 percent p.a. payable monthly (equivalent to 8.30% p.a. successful ) for ten years.
- Pension is payable at the end of every period, during the coverage term of 10 years, in accordance with the frequency of monthly/ quarterly/ half-yearly/ annual as preferred by the pensioner at the time of purchase.
- The strategy is exempted from Service Tax/ GST.
- On survival of the pensioner to the end of the policy term of 10 years, Buy price along with closing pension installment shall be payable.
- Loan upto 75% of Purchase Price shall be allowed after 3 policy years (to meet the liquidity requirements ). Loan interest shall be recovered from the pension obligations and loan to be retrieved from claim proceeds.
- The strategy also allows for premature departure for treating any critical/ terminal illness of self or partner. On such premature departure, 98% of the Purchase Price shall be reimbursed.
- On death of the pensioner during the coverage term of 10 years, the Purchase Price shall be paid to the beneficiary.
- The ceiling of retirement is for a household as a whole, the household will include of pensioner, his/her partner and dependants.
- The shortfall because of the difference between the interest guaranteed and the actual interest earned and the costs relating to government shall be subsidized by the Government of India and reimbursed to the Corporation.
Qualification Requirements and Other Restrictions
- Minimum Entry Age: 60 years (finished )
- Maximum Entry Age: No limitation
- Policy Term: 10 years
- Investment limitation: Rs 15 lakh per senior citizen
- Minimum Pension: Rs. 1,000/- per month
- Rs. 3,000/- percent
- Rs.6,000/- per half-year
- Rs.12,000/- per year
- Maximum Pension: Rs. 10,000/- per month
- Rs. 30,000/- percent
- Rs. 60,000/- per half-year
- Rs. 1,20,000/- annually
Ceiling of retirement is for a household as a whole i.e. total quantity of pension under all of the policies permitted to a household under this plan will not exceed the maximum pension limit. The household for this purpose will include of pensioner, his/her partner and dependants.
The Scheme can be bought offline in addition to online through Life Insurance Corporation (LIC) of India that has been granted the sole privilege to run this Scheme. To purchase online, see http://www.licindia.in/
Payment of Purchase Price
The scheme can be bought by payment of a lump sum Purchase Price. The pensioner has an option to select either the total amount of pension or the Purchase Price. The maximum and minimum Purchase Price under different modes of retirement will be as under:
Mode of Pension Minimum Purchase Price Maximum Purchase Price
- Annual Rs. 1,44,578/- Rs. 7,22,892/-
- Half-yearly Rs. 1,47,601/- Rs. 7,38,007/-
- Quarterly Rs. 1,49,068/- Rs. 7,45,342/-
- Monthly Rs. 1,50,000/- Rs. 7,50,000/-
Mode of retirement payment
The manners of retirement payment are quarterly, monthly, half-yearly & annual. The retirement payment shall be via NEFT or Aadhaar Referral Payment Method.
The first instalment of pension shall be paid after 1 year, 6 weeks, 3 weeks or 1 month from the date of purchase of the exact same based on the mode of retirement payment i.e. annual, half-yearly, quarterly or yearly .
Surrender Value
The scheme allows premature departure during the coverage term under unique circumstances like the Pensioner requiring cash for the treatment of any critical/terminal illness of self or partner. The Surrender Value payable in these cases shall be 98% of Purchase Price.
Loan
Loan facility can be obtained after completion of 3 policy years. The maximum loan that may be granted shall be 75 percent of the Purchase Price.
The interest rate to be charged for loan amount shall be set at periodic intervals. For the loan sanctioned in Financial Year 2016-17, the applicable interest rate is 10 percent p.a. payable half-yearly for the whole duration of the loan.
Loan interest will be retrieved from retirement amount payable under the policy. The Loan interest will accrue in accordance with the frequency of retirement payment under the policy and it'll be due on the due date of retirement. However, the loan outstanding will be recovered in the claim proceeds at the time of exit.
Releted schemes :
 Eligibilty, Benefits is a Pension Scheme announced by the Government of India){kind=link}
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