Investment
Pradhan Mantri Vaya Vandana Yojana (PMVVY) – A senior Citizen Pension Scheme by LIC

Pradhan Mantri Vaya Vandana Yojana (PMVVY) – A senior Citizen Pension Scheme by LIC

Every now and then, the Government of India keeps on introducing new investment schemes for its citizens. Some of the popular schemes are Public Provident Fund (PPF), National Saving Certificate (NSC), Sukanya Samriddhi Yojana (SSY), Kisan Vikash Patra (KVP), etc.

Most of these schemes are popular among senior citizens as they carry minimal risk and provide a good rate of return. Another such scheme that is getting popular amongst senior citizens these days is the “Pradhan Mantri Vaya Vandana Yojana (PMVVY)”.

 Introduction

The Pradhan Mantri Vaya Vandana Yojana is a regular pension scheme for senior citizens aged 60 years or more and was first launched in May 2017. Senior citizens can invest in this scheme up to March 31st, 2023.

This scheme is operated and managed by Life Corporation of India (LIC) only. A person looking to invest in this scheme can purchase it either offline or online by logging on to www.licindia.in.

Eligibility Criteria & other Conditions

Any person looking to invest in PMVVY Scheme should fulfill the following conditions-

  • Minimum Entry Age: Any person with a minimum age of 60 years can invest in this scheme.
  • Maximum Entry Age: No limit has been prescribed.
  • Tenure of Policy: 10 years
  • Minimum Pension and purchase price:
Periodicity of pension Minimum Purchase price Minimum pension
Monthly Rs. 156,658/- Rs.1,000/-
Quarterly Rs.159,574/- Rs. 3,000/-
Half-yearly Rs.161,074/- Rs.6,000/-
Annually Rs.162,162/- Rs.12,000/-
  • Maximum Pension and purchase price:
Periodicity of pension Maximum Purchase price Maximum pension
Monthly Rs. 14,49,086/- Rs.9,250/-
Quarterly Rs.14,76,064/- Rs. 27,750/-
Half-yearly Rs.14,89,933/- Rs.55,500/-
Annually Rs.15,00,000/- Rs.1,11,000/-
  • Payment of purchase price: The purchase price as stated above has to be paid in a lump sum at the time of purchase of the scheme. The purchaser does not have an option to pay the purchase price in installments. The purchase price depends upon the mode (periodicity) of the pension opted by the buyer.

Benefits of the Scheme

Given below are some of the key benefits of the scheme-

  1. The scheme provides a fixed income source to senior citizens.
  2. Attractive assured return at the rate of 7.40 % to 7.66% p.a. for a tenure of 10 years. However, the government keeps on revising the interest rates on a periodical basis. Thus, do check the applicable rates at the time of purchase of scheme.
  3. Maturity Benefit: The entire amount will be refunded to the buyer at the completion of 10 years along with the final installment of the pension.
  4. Surrender Value: Subscriber can surrender scheme at any time during the tenure of 10 years on the ground of medical emergency. Subscriber will get 98% of the purchase price as the surrender value.
  5. Death Benefit: If the subscriber passes away during the term of 10 years, the nominee will get the entire purchase price.
  6. Loan Against Scheme: Subscriber can avail a loan against the scheme for an amount up to 75% of the purchase price after completion of three years from the date of purchase of this scheme.
  7. Free Lookup Period: A subscriber not satisfied with the terms & conditions of the scheme after investing in it can return the policy to LIC within 15 days (30 days if purchased online) from the date of receipt of the policy, mentioning the reasons for the return of the policy. No charges, except stamp duty, if any, will be deducted.

Our Opinion

Investing in PMVVY is a good option for senior citizens looking to invest in a low-risk product with an assured return. The only downside of this scheme is that a buyer needs a considerable amount of funds in hand to purchase the scheme.

 

Disclaimer: This article is for educational purposes only, as well as to give you general information and a general understanding of the product. By using this blog site, you understand that there is no financial advisor-client relationship between you and us. The opinions stated in the blog are solely those of the author, and readers are advised to thoroughly understand a product before investing in it. We shall not be held liable for any misstatements, incomplete information, or inaccuracies therein.

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