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Pradhan Mantri Vaya Vandana Yojana (PMVVY)
The Pradhan Mantri Vaya Vandana Yojana (PMVVY), also known as PM Vaya Vandana Yojana or PMVVY scheme, is a government-backed pension scheme launched to provide regular income and financial security to senior citizens in India. Administered by Life Insurance Corporation (LIC) of India, it offers a guaranteed pension and other benefits to individuals aged 60 and above.
The Pradhan Mantri Vaya Vandana Yojana (PMVVY) carves a unique space in the financial landscape for India's senior citizens. Unlike market-driven investments with their inherent risks, PMVVY offers a guaranteed return, a steady income stream through flexible pension payouts, and a safety net for dependents with its death benefit. Recognising that emergencies can arise, PMVVY even provides a loan facility after a certain period. This comprehensive approach bridges the gap for risk-averse retirees, offering financial security and peace of mind throughout their golden years. Here is a lowdown.
Features and Benefits of PMVVY
The Pradhan Mantri Vaya Vandana Yojana (PMVVY) acts as a lighthouse for senior citizens, guiding them towards a financially secure and worry-free retirement. It offers a multitude of benefits designed to address their specific needs and provide peace of mind. In short, this is like a guaranteed pension plan for senior citizens in India.
One of the most attractive features of PMVVY is the assured return it offers. Unlike investments tied to the whims of the market, PMVVY guarantees a fixed rate of return backed by the government. PMVVY goes beyond a one-time payout; it provides a regular stream of income to meet your ongoing expenses. You have the flexibility to choose how you receive your pension – monthly, quarterly, half-yearly, or annually. But PMVVY doesn't stop there.
It also offers a death benefit, ensuring your loved ones are financially supported even in your absence. PMVVY recognises that life can be unpredictable, and unforeseen financial needs may arise. To address such situations, the scheme offers a loan facility after three policy years. Finally, PMVVY empowers you with the flexibility to choose how you receive your pension. This allows you to manage your finances effectively.
Retirement Financial Security via Pension Payment
PM Vaya Vandana Yojana ensures a regular income stream after retirement. You receive a fixed pension amount monthly, quarterly, half-yearly, or annually, depending on your selection at the time of investment. This guaranteed income helps meet your regular expenses and provides financial stability.
Assurance of Returns
Unlike market-linked investments with fluctuating returns, PMVVY offers a government-backed assured rate of return. This offers peace of mind as you know the exact amount you will receive as a pension throughout the policy term. Not even small savings schemes offer this assurance of return since they can potentially change every three months.
Periodic Payout Options
PMVVY provides flexibility in choosing how you receive your pension. You can opt for monthly, quarterly, half-yearly, or yearly payouts to best suit your financial needs and planning. Simply put, this doubles up as guaranteed monthly income for senior citizens.
Death Benefit
PMVVY is a senior citizen's life insurance. In case of the policyholder's unfortunate demise during the policy term, the nominee receives the purchase price with any accrued interest. This benefit provides financial security for your dependents.
Maturity Benefit
Upon successful completion of the 10-year policy term, the policyholder receives the purchase price with the accrued interest. This benefit offers a lump sum amount in addition to the regular pension income.
Surrender Value
PMVVY allows premature surrender after a minimum policy period of 3 years. However, the surrender value received will be less than the purchase price, with deductions for surrender charges.
Loan Facility
The scheme offers a loan facility after three policy years. You can borrow up to 75% of the purchase price to meet any unforeseen financial needs.
Free Lock-in Period
Unlike many pension plans with long lock-in periods, the Pradhan Mantri Vaya Vandana scheme offers a relatively shorter 10-year fixed term. This ensures regular income for a significant period while providing access to the invested amount upon maturity.
Exclusion
The PMVVY scheme is not available for individuals below 60 years of age or those already enrolled under any other government pension scheme for senior citizens.
Eligibility Criteria for the Pradhan Mantri Vaya Vandana Yojana
As you approach retirement, financial security becomes a top priority. The Pradhan Mantri Vaya Vandana Yojana (PMVVY) emerges as a compelling option for Indian senior citizens seeking a guaranteed income stream and peace of mind in their golden years. But is this scheme for you? Let's delve into the Pradhan Mantri Vaya Vandana Yojana eligibility criteria and see if PMVVY aligns with your retirement plans. To be eligible for PMVVY, you must be an Indian citizen aged 60 years or above. There is no upper age limit for enrollment. The scheme is not available for Non-Resident Indians (NRIs).
Purchase Price Payment under PMVVY for Various Periodic Payouts
The investment amount in PMVVY varies depending on your desired monthly pension. The minimum investment is Rs. 1,50,000 for a monthly pension of Rs. 1,000, with a maximum investment of Rs. 7,50,000 for a maximum pension of Rs. 5,000.
Benefits of Pension with Assurance
PMVVY offers a guaranteed pension throughout the policy term, safeguarding you against market fluctuations and inflation. This assured income provides financial stability and peace of mind during your retirement years. Essentially, there are multiple benefits of PMVVY for retirees.
Death Benefit
PMVVY offers a death benefit to the nominee, ensuring your dependents receive financial support in case of your unfortunate demise.
Maturity Benefit
Upon policy maturity, you receive the purchase price with the accrued interest, providing an additional lump sum amount.
Surrender Value
While premature surrender is allowed after three years, the received amount will be lower than the invested amount due to surrender charges.
Loan Facility
The scheme offers a loan facility after three years to address any urgent financial needs.
What is the Application Process of the PMVVY Scheme?
You can apply for PMVVY online through the UMANG app or LIC website or offline by contacting your nearest LIC branch. The application process involves submitting a completed application form, identity proof, address proof, and age proof documents.
Offline
Visit your nearest LIC branch and collect the application form. Fill it out, attach the required documents (identity proof, address proof, and age proof), and submit it to the LIC agent.
Online
One can easily download the application form from the LIC website or the UMANG app. Fill it out electronically, upload scanned copies of the documents, and submit the online application.
Documents Required to Apply for Pradhan Mantri Vaya Vandana Yojana
- Completed application form
- Identity proof (PAN card, Aadhaar card, etc.)
- Address proof (utility bills, passport, etc.)
- Age proof (birth certificate, voter ID, etc.)
Taxability Provisions of PMVVY
The amount deposited in the PMVVY scheme is exempt from Income Tax under Section 80C of the Income Tax Act, 1961. The pension amount received under PMVVY is taxable as per your income tax slab.
How to Check PMVVY Policy Details
You can check your PMVVY scheme details online through the LIC portal or UMANG app using your policy number or contact LIC customer care for assistance.
Contact Details of the PMVVY Policy
For any queries or assistance regarding PMVVY, you can contact LIC customer care or visit your nearest LIC branch. They will provide you with the relevant contact details.
FAQs - Pradhan Mantri Vaya Vandana Yojana (PMVVY)
What are the documents that must be submitted to invest in the PMVVY scheme?
- Completed application form
- Identity proof (PAN, Aadhaar)
- Address proof (utility bills, passport)
- Age proof (birth certificate, voter ID)
Can a policyholder invest in PMVVY multiple times?
No, PMVVY allows only one investment per person.
What are the benefits of Pradhan Mantri Vaya Vandana Yojana in case an investor needs funds in an emergency or after his/her demise?
PMVVY offers a loan facility after three years and a death benefit for nominees to provide financial support.
If I want more than Rs. 1,000 pension per month, how much should I invest?
The investment amount increases with the desired pension. Invest Rs. 7,50,000 for a maximum of Rs. 5,000 monthly pension.
Is the rate of interest fixed for this pension scheme?
The interest rate is reviewed annually but guaranteed for the entire policy term for those who enrol during that specific window.
What is the procedure to apply for the scheme?
You can apply online via the UMANG app or LIC website or offline at your nearest LIC branch.
What are the various modes by which I can invest in the scheme?
You can invest a lump sum amount as per the desired pension bracket.
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