What is Pradhan Mantri Vaya Vandana Yojana
Pradhan Mantri Vaya Vandana Yojana is a non-linked, non-taking part, pension scheme subsidized by the Government of India. GOI launched PMVVY in May 2017. As this is one of best saving plan with efficient ROI (return on investment) for senior citizens, so this scheme is getting immense popularity among old age group.
GOI solely allowed LIC of India to operate this scheme. It bears LIC Plan No -856 or Table No -856 as popularly know and UIN No. – 512G336V01
The Government of India has introduced Pradhan Mantri Vaya Vandana Yojana, with changed rate of pension under this plan and extended the period of sale of this plan for a further period of three years from Financial Year 2020-21 till 31 st March 2023.
As per the terms and conditions of this plan, Government of India (Ministry of finance) will review guaranteed rates of pension for policies sold during a year and decide at the beginning of each year. For the first financial year i.e. up to 31st March 2022, the Scheme will provide an assured pension of 7.40% p.a. payable monthly.
How to purchase LIC pradhan mantri vaya vandana yojana?
You can purchase this scheme offline through LIC agents and online through LIC website. It is easy to purchase this scheme online, the whole process is described further in this post.
What is eligibility for Pradhan Mantri Vaya Vandana Yojana (pmvvy)
What are eligibility conditions for pmvvy? other restrictions of pmvvy:
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
Total amount of purchase price under all the policies under this plan, and all the policies taken under Pradhan Mantri Vaya Vandana Yojana (with UIN 512G311V01 and UIN: 512G311V02) allowed to a senior citizen shall not exceed Rs. 15 lakhs.
Payment of purchase price for pmvvy
You can purchase this scheme pmvvy by paying a lump sum purchase price. The pensioner has an option to choose either the amount of pension or the Purchase Price.
The minimum and maximum purchase price under different modes of pension will be as under:
|Mode of Pension||Minimum Purchase Price||Maximum Purchase Price|
|Yearly||Rs. 1,56,658/||Rs. 1,449,086/-|
|Half-yearly||Rs. 1,59,574/-||Rs. 14,76,064/-|
|Quarterly||Rs. 1,61,074/-||Rs. 14,89,933/-|
|Monthly||Rs. 1,62,162/-||Rs. 15,00,000/-|
LIC calculate the purchase price by rounding off to the nearest rupee.
Mode of pension payment under pmvvy
You can select mode of pension payment as monthly, Quarterly, half-yearly & yearly. The pension payment shall be through NEFT or Aadhaar Enabled Payment System.
The purchase of the policy under this Government subsidised scheme requires unique Aadhaar number validation.
LIC pays the first instalment of pension after 1 year, 6 months, 3 months or 1 month from purchase of the same depending on the mode of pension payment i.e. yearly, half-yearly, quarterly or monthly respectively.
Premature exit / Surrender value of pmvvy
The scheme allows premature exit during the policy term under exceptional circumstances like the Pensioner requiring money to treat any critical/terminal illness of self or spouse. The Surrender Value payable in such cases shall be 98% of Purchase Price.
Can we take loan from pmvvy scheme?
Loan facility is available after completion of 3 policy years. The maximum loan you can avail under pmvvy will be 75% of the Purchase Price.
The rate of interest to be charged for loan amount shall be determined at periodic intervals.
For the loan sanctioned till 30th April 2021, the applicable interest rate is 9.5% p.a. for the entire term of the loan. Loan interest will be recovered from pension amount payable under the policy. The Loan interest will accrue as per the frequency of pension payment under the policy and it will be due on the due date of pension. However, the loan outstanding shall be recovered from the claim proceeds at the time of exit. The applicable interest rate shall be based on the
method approved by IRDAI.
Taxation of pmvvy
Statutory Taxes imposed on this plan by the Government of India or any other constitutional Tax Authority of India shall be as per the Tax laws and the rate of tax as applicable from time to time.
The amount of Tax (GST) paid shall not be considered for the calculation of benefits payable under the plan.
Documents required for pmvvy
The following are the requisite documents to subscribe under the pmvvy scheme:
- Aadhaar card
- Proof of age
- Proof of address
- Passport-size photo of the applicant
- Documents showing that the applicant has retired from employment
Sample calculation for pension rates
The pension rates for Rs.1000/- Purchase Price for different modes of pension payments
are as below:
Yearly : Rs. 76.60 p.a.
Half-yearly : Rs. 75.20 p.a.
Quarterly : Rs. 74.50 p.a.
Monthly : Rs. 74.00 p.a.
LIC round off the pension instalment to the nearest rupee. These rates are age independent.
What are pmvvy disadvantages
There are few disadvantage in pradhan mantri vaya vandana yojana.
You cannot access your money except in case of serious illnesses. There is a facility of loan in pmvvy after 3 years but I wouldn’t go that far. I don’t like to pay to access my money.
pmvvy free look period
If a policyholder is not happy with the “Terms and Conditions” of the policy, he/she may return the policy to the Corporation within 15 days (30 days if You purchase this policy online) from receipt of the policy stating the reason of objections. The amount to be refunded within free look period shall be the Purchase Price deposited by the policyholder after deducting the charges for Stamp duty and pension paid, if any.
What is pradhan mantri vaya vandana yojana interest rate 2021?
- For the financial year 2021-22, pmvvy scheme will yield an assured rate of return of 7.40% per annum. Senior citizens will get a minimum pension of 1,000 for every month depending on the amount invested in the scheme. Maximum pension under pmvvy scheme is Rupees 10,000 per month.
- Standard term for policy is of 10 years.
- LIC have declared interest rate at 7.4% for the monthly pension for FY 2021-21.
- These are Pension option fixed interest rates:
- Annual plan – 7.60%
- Half-yearly plan – 7.52%
- Quarterly plan – 7.45%
- Monthly plan – 7.40%
What are pmvvy disadvantages?
There is maximum investment limit of Rs 15 lacs per senior citizen. Therefore, the quantum of income from this scheme is capped.
Where to open pmvvy account?
Individuals can buy Pradhan Mantri Vaya Vandana Yojana both offline and online from Life Insurance Corporation of India.
Can pmvvy be opened online?
Yes, you can easily buy pmvvy scheme online through LIC India website. Following is the method to buy pmvvy online.
- Go to the official website of LIC India and get on on the “Online Policy” option or directly click for pmvvy Online Policy LIC Online Policy.
- Click the ‘Buy Now’ button under LIC Plan 856 (Pradhan mantra Vaya Vandana Yojana).
- Then get on the ‘Buy online’ box available on next page and a form will open.
- Fill this form with all your details, such as name, phone number, email ID, and date of birth, and click on the “Calculate Premium” button.
- After filling the form, you will receive an OTP on your mobile, fill it in the next section, and click on the “proceed” button. After entering OTP, select ‘NO’ on the next screen and click on the Next button.
- Than, you will see the complete form of the LIC pmvvy plan, where you need to select “Purchase Option”, “Pension Mode”, “Amount” and “Payment Mode” and other respected details as per your requirement.
- After filling this form, click on the “Calculate Premium” button.
- Then you will get updates about the calculated premium and you need to enter your Aadhaar number and pay calculated premium online.
- After successful payment of your premium, you will get your policy number and entire policy document on your email ID.
What is pmvvy agent commission?
Insurance agents and dealers gets a commission of 0.1% on invested amount in a newly launched pension scheme for senior citizen known as Pradhan Mantri Vaya Vandana Yojana (pmvvy).
Is scss or pmvvy better?
For pmvvy investors, no tax benefits are eligible. But tax benefit under Section 80C is available for the contribution made to SCSS. Interest income earned from both pmvvy and scss is fully taxable according to the tax slabs of the senior citizen and under the category of ‘Income from other sources.
PM vaya vandana yojana (latest update on pmvvy)
Recently, the Union Cabinet has extended the last period of investment under this scheme from 31 March 2021 to 31 March 2023. Pradhan Mantri Vaya Vandana Yojana implemented through the Life Insurance Corporation (LIC), aims at giving a guaranteed minimum pension to senior citizens (60 years and above) based on assured returns on purchase price/ subscription amount.
Under this scheme, senior citizens will have to invest Rs 1,56,658 for a minimum pension of Rs 12,000 per year and Rs 1,62,162 for getting a minimum pension amount of Rs 1000 per month.