What is Pradhan Mantri Vaya Vandana Yojana?
What is Pradhan Mantri Vaya Vandana Yojana?
The Government of India emerges with different social security schemes based on requirements. For many years, the Atal Pension Yojna, Senior Citizen Pension Scheme, and many other schemes have already been active across the country.
The Government of India announced a pension scheme to get added to the list. It is for above 60 years, senior citizens. They named it Pradhan Mantri Vaya Vandana Yojna (PMVVY). This scheme came into force on 4th May 2017 and was available till 31 march 2020. Now, the scheme is expanded by the government till 31 March 2023.
The Pradhan Mantri Vaya Vandana Yojna is managed & operated by LIC. Whereas, LIC stands for a Life Insurance Corporation. They are the largest provider of life insurance in India. The scheme produces a regular pension with a frequency of yearly, quarterly or monthly.
Now, let’s read all about Pradhan Mantri Vaya Vandana Yojna.
Benefits of the scheme
Under the PMVVY, here are the following benefits supporting the scheme:
- The member in this scheme will be provided with an assured return for 10 years. The rate will be between 8 to 8.3 percent.
- Under the scheme, the fixed amount will be provided regularly.
- Once the policy term is completed for 10 years, the whole amount would be paid out to subscribers.
- To cover emergencies, a loan of approx 75% of the purchased price can profit after three years.
- For the reason of medical emergencies of self or spouse, the beneficiary can withdraw 98% of the purchased price.
- On the death of the subscriber, the nominee will be given all the purchase prices as per the terms of the policy.
Eligibility Conditions and Other Restrictions
- Under the PMVVY, there are no such defined eligibility criteria for the subscriber.
- Apart from that, the subscriber should be above 60 years of age.
- The maximum entry age is not limited.
- The policy term for the applicant is for 10 years.
- Under this scheme, the highest purchase price is limited to Rs. 15 lakh per senior citizen. While it proposes Rs. 10,000/ of monthly pension.
- The least investment price is limited to Rs. 1.5 lakh with a monthly pension of Rs 1,000/.
Documents required for PMVVY
For the PMVVY, below is the list of the documents required for subscribers to get benefits:
- Age proof
- Address proof
- Aadhaar card
- Applicants passport size photoApplicant document of the retirement from employment
Payment of Purchase Price
By paying the round figure of the purchase amount, the scheme can be purchased by the pensioner. Not only this, the pension amount or the purchase amount can be chosen by the pensioner. For the different modes of pension, here is the list of maximum and minimum purchase prices:
Pension Payment Mode
The amount of pension is completed on a monthly, quarterly, half-yearly & yearly manner. While the payment is made via NEFT or payment system enabled with Adhar.
From the date of the purchase, the initial installment shall be paid after 1month, 3 months, 6 months, or 1 year. It will depend upon the mode of payment of pension.
Under this scheme, the pensioner is allowed to exit the policy term in case of exceptional situations. It could be the money required for treating the illness of their spouse or themselves. In a situation like this, the value of surrender to be paid will be 98% of the price of purchase.
After completing the 3-year term in the policy, the subscriber can take a loan. The highest amount allowed will be 75% of the purchase price of the pensioner.
For loans, the charge the rate of interest will be based on periodic intervals. While under the policy, the rate of interest will be recovered from the payable amount of pension.
On the other hand, the loan interest under the policy will be collected according to the frequency of the payment of the pension. While it will be due on the pension’s due date.
Period of Free Look
If the policy’s conditions and the term are not satisfying the insuree, then it can be returned by them. But in 15 days, the returning of the policy shall be done to the corporation. If the policy is purchased online, then it shall be returned within 30 days. The policyholder will give the reason for the objections of the policy while returning it from the date of receipt.
In the free look period, the purchase price delivered by the subscriber will be the refundable amount. If there are any charges paid for stamp and policy, then they will also be deducted.
In case the subscriber commits suicide, there will be no eviction. There will be a complete charge of the purchase price.