Pradhan Mantri Vaya Vandana Yojana (PMVVY) is an insurance policy-cum-pension scheme that provides security to senior citizens. This pension plan is provided by Life Insurance Corporation (LIC) which caters to the need for post-retirement financial planning.
The scheme was launched after the success and popularity of Varishtha Pension Bima Yojana 2003 (VPBY-2003), Varishtha Pension Bima Yojana 2014 (VPBY-2014) schemes, with an aim to protect elderly persons aged 60 years and above against a future fall in their interest income due to the uncertain market conditions.
As per the scheme, on payment of an initial lump sum amount ranging from a minimum purchase price of Rs 1,50,000 for a minimum pension of Rs 1,000 per month to a maximum purchase price of Rs 7,50,000 for maximum pension of Rs 5,000 per month, subscribers will get an assured pension payable monthly.
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PMVVY, which was earlier available from May 4, 2017 to March 31, 2020, was extended by the government for another three financial years till March 31, 2023. The scheme will offer an assured rate of return of 7.40 per cent per annum for the year 2022-23 and thereafter to be reset every year.
Benefits of PM Vaya Vandana Yojana
Pension Payment: On survival of the Pensioner during the policy term of 10 years, pension in arrears (at the end of each period as per mode chosen) shall be payable.
Death Benefit: On death of the Pensioner during the policy term of 10 years, the Purchase Price shall be refunded to the beneficiary.
Maturity Benefit: On survival of the pensioner to the end of the policy term of 10 years, Purchase price along with final pension installment shall be payable.
Maximum investment allowed is INR 15 lakh.
Eligibility Conditions and Other Restrictions:
Minimum Entry Age : 60 years (completed)
Maximum Entry Age : No limit
Policy Term : 10 years
Minimum Pension : Rs 1,000/- per month; Rs 3,000/- per quarter; Rs 6,000/-per half-year and Rs 12,000/- per year.
Maximum Pension : Rs 9,250/- per month; Rs 27,750/- per quarter; Rs 55,500/- per half-year and Rs 1,11,000/- per year.
Payment of Purchase Price
The scheme can be purchased by payment of 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:
Loan Facility
Loan facility is available after completion of 3 policy years. The maximum loan that can be granted shall be 75 per cent 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 April 30, 2021, the applicable interest rate is 9.5 per cent p.a. for the entire term of the loan.
Taxation
Statutory Taxes, if any, imposed on this plan by the government 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.
