Benefits of Pradhan Mantri Vaya Vandana Yojana

Here are some of the key advantages provided to the applicants under Pradhan Mantri Vaya Vandana Yojana-

• The scheme furnishes the pensioner with 8.00% returns p.a payable monthly for 10 years
• Taxes like Service tax or GST are exempted from PMVVY
• Throughout the 10 years period of the policy, the pension is payable in arrears at the end of each period. Payments are made monthly/quarterly/half-yearly/yearly whichever is selected by the pensioner
• The entire amount including the purchase price and final pension installment is payable at the end of the policy term of 10 years when the pensioner survives
• In case of emergency, a loan up to 75% of the Principal price is allowed to be sanctioned after 3 years into the policy. The interest on this loan is recovered from pension installments whereas the loan amount is recovered from claim proceeds
• Premature Exit- 98% of the Purchase price is refunded for treatment in case of medical emergencies/critical illness etc. of self/spouse.
• In case the pensioner enrolled dies unfortunately, the purchase price is paid to the nominee

Eligibility Criteria for PMVVY

There are certain eligibility conditions to apply for Pradhan Mantri Vaya Vandana Yojana:

• The applicant should be at least 60 years of age (completed) while entering the scheme
• There is no maximum age of entering into the policy
• Must be a citizen of India
• Minimum policy term- 10 years

Documents Required for the Scheme

Given below are necessary documents required to be submitted by the applicant before enrolling into Pradhan Mantri Vaya Vandana Yojana-

• Aadhaar Card
• Proof of Age
• Proof of Residence
• Passport size photos of the applicant
• Relevant Document/Declaration to show the retired status of the applicant

Application Process of the Scheme

The scheme requires certain steps which must be followed to get enrolled and obtain maximum benefits from the plan-

Offline Process:

• Application forms are available in all the LIC branches
• The applicant must fill the form
• Attach all the required documents after self-attesting them
• Submit the form, along with documents, to any LIC branch

Online Process:

• Visit the LIC website
• Click on “Products”
• Look for “Pension Plans” and proceed
• Fill the application form available under “Buy Policies”
• Submit the form and the required documents for further process

Pradhan Mantri Vaya Vandana Yojana- Modes of Payment

Payments of pension are made in time periods which is selected by the pensioner while applying for the scheme. These periods are categorised as monthly, quarterly, half-yearly, yearly payments. The modes of pension payment are as follows-

• NEFT
• Aadhaar Enabled Payment System

Scheme Validity

As per the announcement made in the Budget 2018, the scheme will remain open for subscription till 31st March 2020. The scheme can be purchased offline as well as online through the website of the LIC.

Maximum Investment Under the Scheme

• As per the latest government notification, the subscriber can invest up to Rs.15 lakhs in the scheme. However, the limit applies only on the investing individual. Therefore, if your spouse is also older than 60 years, she can invest up to Rs. 15 lakhs in the scheme separately.
• The minimum investment in the scheme to avail Rs.1000 per month is Rs.1.5 lakh.

Returns under PMVVY

Pradhan Mantri Vaya Vandana Yojana (PMVVY) provides a government return of 8% per.  In case you subscribe for monthly pension scheme, the 8% annual interest is equivalent to 8.3%. Since the scheme essentially operates as a pension plan, it does not attract any GST or service charge.

However, there is no income tax relief for the scheme. The returns are taxable. The difference between interest generated by the LIC and the assured returns of 8% will be borne by the Government of India. The central government will pay the differential amount to LIC as a subsidy.