Pradhan Mantri Vaya Vandana Yojana

The welfare of the senior citizens (above 60 years) is something that cannot be ignored. India being a senior citizen-friendly country lays special emphasis on the social and economic security of the old-aged people. Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a flagship pension scheme for senior citizens, which was launched in May 2017. In a big relief to the retirees who depend on the pension for their basic expenses, Pradhan Mantri Vaya Vandana Yojana was announced to enable them to generate income post retirement.

The Union Cabinet proposed some changes to the scheme policy. The scheme was initially made available for one from the launch date, which has been extended now until March 31, 2020. Regarding the investment limit, it has been doubled from 7.5 Lakhs to 15 Lakhs. The article discusses the pension scheme in detail.

Features of Pradhan Mantri Vaya Vandana Yojana

The scheme offers an assured return of 8 per cent per annum throughout the term of the policy, which is ten years. The minimum investment that can be made on the policy is Rs.1.5 Lakhs and the maximum limit is Rs.15 Lakhs. The applicant decides the purchase price, i.e., the amount invested in buying the policy.

The pension period can be monthly, quarterly, half-yearly or yearly as per the pensioner’s option and the pension amount will be paid at the end of each period. The retiree can earn Rs.1000 up to Rs.10,000 per month depending on the amount invested in the policy. A pension amount of Rs.3000 to Rs.30,000 can be earned on quarterly mode while Rs.6,000 to 60,000 on a half-yearly basis. On the whole, the retiree can yield a revenue of Rs.12,000 to Rs.1,20,000 per year.

The maximum pension limit applies for the total amount permitted to the entire family (includes the pensioner, spouse and dependents) under this policy.

Opening a Pension Account

Any individual of 60 years who has retired can open an account within one month of the retirement. The purchase amount should not exceed the retirement benefit.

Pre-mature Exit

If the pensioner or the spouse is affected by any terminal illness during the pension term, the investor can withdraw. On such an exit, 98 per cent of the purchase price will be reimbursed. In case of pensioner’s death during the ten years, the purchase price would be refunded completely to the nominee.

Closure of Account

The account terminates in ten years from entering into the scheme. Purchase price along with final pension instalment is paid to the pensioner on survival to the end of the policy term of ten years.

Eligibility Criteria for Pradhan Mantri Vaya Vandana Yojana

The senior citizen planning to avail this scheme for a secure retirement should fulfil the following conditions.

• The applicant should be an Indian by citizenship
• The applicant should be a senior citizen (60 years and above)
• There is no maximum age limit to benefit from this scheme
• The person who continues to work after retirement is not eligible.

Documents Required

The applicant should furnish the necessary documents.

• Aadhar card
• Age proof
• Address proof
• Passport size photo
• Relevant documents proving that the applicant has retired

Application Process

The senior citizen can apply either online or offline for Pradhan Mantri Vaya Vandana Yojana.

Offline Process

The Government has implemented this scheme through LIC and hence the application form should be filled and submitted to any branches of LIC office. The application form can be procured by either visiting any LIC office or can download a copy of the application form which is provided below.

Online Process

Step 1: Online purchase of the certificate can be made by first visiting the official website and clicking Pradhan Mantri Vaya Vandana Yojana under ‘Buy Policies’ header.

Step 2: On clicking ‘Buy Online’ button, the application form will open on next page.

Step 3:  Fill in the necessary details in the PMVVY application form and click “Get Access ID”. A 9-digit access ID will be sent by email/SMS.

Step 4:  Enter the access ID in the access ID box and click “Proceed”.

Step 5: Select the PMVVY pension plan and complete the application. On completing the application, an acknowledge number and a policy number at the end of the application form will be provided.

Mode of Payment

The pension payment would be disbursed to the applicant through NEFT or Aadhaar Enabled Payment System based on the pension period selected by the applicant.

Benefits of Pradhan Mantri Vaya Vandana Yojana

1. The pension scheme allows the pensioner to apply for a loan amount of 75% of purchase price after three years of the pension term to meet urgent requirements. The interest depends on the purchase price.
2. This pension plan allows pre-mature exit
3. The plan is exempted from GST/Service tax. The interest earned is taxable.

Note: The scheme has a facility of returning the policy to the Corporation within 15 days (30 days if this policy is purchased online) from the date of receipt of the policy if  the policyholder is not satisfied with the “Terms and Conditions” of the policy provided that he/she should state the reason of objection. Stamp Charges will be deducted from the amount paid.