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The Indian government has introduced a pension system, which will be available from 4 May 2017 until 31 March 2020. The Government of India raised the maximum limit under Pradhan Mantri Vaya Vandana Yojana’s plan to Rs.15 lakh in the 2018-2019 Budget Speech. The plan is available online and offline through the Life Insurance Corporation of India (LIC). The scheme’s principal goal is to provide older residents with a periodic pension during low-interest rates.
Table of Contents
- Pradhan Mantri Vaya Vandana Yojana Eligibility
- Pradhan Mantri Vaya Vandana Yojana Scheme Benefits
- PMVVY – Purchase Price payment
- PMVVY – Pension payment modes
- Examples of Pension Rates under the PMVVY scheme
- Application Process of Pradhan Mantri Vaya Vandana Yojana
- Documents required to apply for Pradhan Mantri Vaya Vandana Yojana
- FAQs
Pradhan Mantri Vaya Vandana Yojana Eligibility
Individuals must satisfy the following eligibility conditions to qualify for the PMVVY strategy:
- The applicant must be at least 60 years old to enter.
- There is no upper age limit for entry.
- Policy tenure: The policy is valid for ten years.
- The following is the minimum pension that can be earned: The monthly, quarterly, semi-annual, and annual minimum pensions are rs 1,000, 3,000, 6,000, and 12,000, correspondingly.
- Maximum pension: 10,000, 30,000, 60,000, and 1,20,000 rs are the maximum pensions earned every month, quarter, half-year, and year, respectively.
- When determining the maximum pension ceiling, the entire family is considered. The retiree, his or her descendants, and spouse comprise the household under this arrangement.
Pradhan Mantri Vaya Vandana Yojana Scheme Benefits
The following are the advantages of the PMVVY plan:
- The pensioner will get a guaranteed return of 8% each year for the term of the insurance, which is ten years.
- Pension Payment: If the pensioner endures the policy’s term, the pension will be provided in instalments. The retiree can also specify how the pension will be paid.
- Death benefit: If the pensioner dies during the policy’s term, the purchase amount will be returned to the beneficiary.
- Maturity profit: If the pensioner lives through the whole policy term, the initial cost will be paid in addition to the final pension payment.
- Loan facility: After three years of coverage, the pensioner can borrow against the policy. A loan of up to 75% of the original cost is available. The interest on the borrowing will be repaid through the pension payout. If a loan was approved before April 30, 2018, the interest rate is 10% per year. And is due half-yearly for the duration of the policy term.
- Free trial period: If the policyholder is dissatisfied with the conditions of the insurance, he or she has 15 days to cancel it. If the plan is purchased online, the free trial is 30 days.
PMVVY - Purchase Price payment
Individuals can acquire the program by making a flat sum payment. The pensioner can select either the purchase price or the pension amount. The lowest and highest retirement prices for each modality are listed in the following table:
Pension mode | Least Purchase Price (Rs.) | Highest Purchase Price (Rs.) |
One Month | 1,50,000 | 15,00,000 |
Three Months | 1,49,068 | 14,90,683 |
Six Months | 1,47,601 | 14,76,015 |
Yearly | 1,44,578 | 14,45,783 |
When the Purchase Price is charged, it will be adjusted to the closest rupee.
PMVVY - Pension payment modes
The many types of payment accessible include monthly, quarterly, half-yearly, and annual. Pension payments must be made through the Aadhaar Enabled System or the National Electronics Transferring Funds (NEFT).
The initial transfer must be made within 30 days, three months, six months, or One year after the date the insurance was purchased, depending on the manner of payment.
- The PMVVY plan is subject to taxes.
If the Indian Government or some other legal tax Authority of India imposes Statutory Taxes, they will be by the applicable tax laws and tax rates. The amount of tax collected cannot be considered when determining the benefits of the PMVVY scheme.
- Exiting the PMVVY initiative too soon
Only the need for money for the care of a terminal or severe disease for the policyholder or his/her spouse allows for a premature withdrawal from the insurance. The Surrender Value must be 98% of the Appraised Value.
Examples of Pension Rates under the PMVVY scheme
The following are the retirement rates for an Rs.1,000 purchase price under the different pension modes of payment:
Monthly: Rs.80
Quarterly: Rs.80.50
Half-yearly: Rs.81.30
Yearly: Rs.83
The values mentioned above are computed without considering the age. The monthly pension payment would likewise be rounded up to the next rupee.
The PMVVY program has excluded certain specific cases,
- Suicide: If the policyholder dies, the whole purchase amount is due because there is no exception.
- Fraudulent practices in the PMVVY program
In the event of insurance fraud, LIC must notify the insured within three years of the policy’s release.
- The time when the hazards started.
- The day when the insurance was reinstated.
- The date the rider was introduced to the plan, whichever comes first.
The insurers must also furnish the insured, his or her legal agent, or nominees with written explanations for why the such activity was done.
Application Process of Pradhan Mantri Vaya Vandana Yojana
Click on ‘Products,’ then ‘Pension plans.’
Select ‘Pradhan Mantri Vaya Vandana Yojana.’
Fill out the form with the necessary information and click the ‘Get Access ID’ button.
You will be sent an ID to your mobile phone or email address.
Choose the plan that best meets your requirements, fill out the form, and submit it.
Documents required to apply for Pradhan Mantri Vaya Vandana Yojana
PAN (Permanent Account Number) Card
Address proof, such as a passport or Aadhar card
A copy of the check leaf or the first page of the bank passbook must be given. That account will be credited with the pension.
