Pradhan Mantri Vaya Vandana Yojana is a single premium payment pension plan. This pension plan offers an option to either choose the amount of pension or the purchase price. The all-new Pradhan Mantri Vaya Vandana Yojana was launched on 4th May 2017. It is a government-subsidized pension scheme that provides an assured return of 7.66% per annum, which is paid monthly to the pensioner surviving during the policy term of 10 years. Also, this plan is exempted from goods and service tax and is available for online purchases too.
Eligibility Criteria and Other Restrictions-
Rs. 14, 49,086
The modes of pension payment are monthly, quarterly, half-yearly & yearly. The pension payment can be done through NEFT or Aadhaar Enabled Payment System.
On the successful completion of the term of the policy, a purchase price and final pension instalment are given to the pensioner.
On the occasion of unforeseen death of the pensioner during the term policy, the purchase price is returned to the nominee.
If the pensioner survives throughout the policy, the pension is paid according to the selected pension payment mode.
Surrender value is available under this policy. The policyholder can exit the policy term before maturity under exceptional circumstances like the pensioner requiring money for the treatment of any critical/terminal illness of self or spouse. The Surrender Value payable in such cases can be 98% of Purchase Price.
The loan facility is available under Pradhan Mantri Vaya Vandana Yojana. One can avail of this facility after the completion of 3 years of the policy term. The maximum loan that can be granted should be 75% of the purchase price. The rate of interest to be charged for loan amount would be determined from time to time by LIC. Loan interest will be recovered from the pension amount payable under the policy.
If a policyholder is not satisfied with the “Terms and Conditions” of the policy, he/she may return the policy to the Corporation within 15 days (30 days if this policy is purchased online) from the date of inception of the policy stating the reason of objections.
In this case, the policyholder will get the entire amount after deducting the charges for Stamp duty and pension paid (if any).
There are no tax benefits under this policy. The pension you receive is taxable. This would be added to your income and taxed at the marginal tax rate, similar to fixed deposits.
Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a good and simple product especially for aged people looking for regular income after retirement.
You can buy PMVVY via online and offline modes. Let's find out more about them.
Below is the list of required documents to invest in the PMVVY scheme:
Suicide is not covered under this plan. However, the plan will provide the complete purchase price to the nominee.
The demerits of this policy are:
Last updated on 09-05-2020