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The Government of India comes up with a number of social security schemes every now and then based on the need of the hour. Public Provident Fund (PPF), Atal Pension Yojana, National Pension Scheme, Senior Citizens Saving Scheme, and many other schemes are already functional for years now.
They are popular among those who are planning and managing their retirement. A new addition to the list is Pradhan Mantri Vaya Vandana Yojana (PMVVY).
PMVVY is a retirement and pension scheme that is operated and managed by the Life Insurance Corporation of India (LIC), the largest life insurance provider in India. Here are all the details you may want to know about the scheme.
Pradhan Mantri Vaya Vandana Yojana (PMVVY) is retirement cum pension scheme announced by the Indian Government. The plan is subsidised by the government and was launched in May 2017.
The money invested by the purchasers of the scheme is called the purchase price. As the sovereign guarantees back the scheme, it offers an assured rate of return on investment.
The scheme pays out regular pension and the frequency can be monthly, quarterly, half-yearly or yearly. The PMVVY is an excellent alternative to traditional bank deposits.
The following are the requisite documents to subscribe under the PMVVY scheme:
The following are some of the key benefits of subscribing to the PMVVY scheme:
One can subscribe to the PMVVY scheme in the following ways:
i) Online procedure:
ii) Offline Procedure
As stated earlier, the scheme can be purchased by paying a lumpsum price known as the purchase price of the policy. The PMVVY scheme provides a pension to the policyholder during the policy term of 10 years against the payment of the purchase price. At the end of the policy term of 10 years, the purchase price is returned to the policyholder.
The pension is paid to the policyholder at the end of each period as per the chosen pension payment mode, i.e. monthly, quarterly, half-yearly or yearly. The pension payment under this scheme will start as early as next month of the payment of the purchase price when the policyholder chooses a monthly mode of payment.
The pension amount for every month, quarter, half-year or year is paid as per the specific rate of interest on the purchase price invested for 10 years. The specified rate of interest/return provided on the purchase price varies on the mode of pension payment, which are as follows:
|Mode of Pension Payment||Rate of Interest (p.a) for FY 21-22|
The modes of pension payment are monthly, quarterly, half-yearly and yearly. The policyholder must choose the mode of pension payment at the time of subscribing to the policy. Once the mode is selected, it cannot be changed to another mode during the term of the policy.
For the purchase of the policy, the policyholder requires to have a unique Aadhaar number validation. The pension payment will be done through NEFT or Aadhaar enabled payment system. Thus, the pension holder need not visit the bank or LIC agent to collect the pension payments.
The minimum purchase price is Rs.1,62,162 for which a policyholder receives a monthly pension of Rs.1,000 at the specified rate of interest for monthly mode of pension payment, i.e. 7.40% p.a.
The amount of pension that a subscriber receives would depend on their purchase price. The minimum and maximum purchase price and the minimum and maximum pension payment against the purchase price for each mode is shown in the table below:
|Mode of Pension Payment||Minimum amount of Purchase Price (investment)||Minimum Pension amount against the Purchase Price||Maximum Purchase Price (investment)||Maximum Pension amount against the Purchase Price|
The PMVVY is not a tax saving scheme but an investment plan. The senior citizens will receive a pension every month, quarter, half-yearly or yearly depending upon the investment. The returns received through this scheme are taxed at the rate of tax applicable. There is no income tax rebate for the contribution and policyholders cannot claim deduction under Section 80C of the Income Tax Act under this scheme. However, PMVVY is exempt from GST.
The steps to check the policy details are as follows:
Step 1: Go to the Umang PMVVY page.
Step 2: Scroll down and click on the ‘Open’ button under the ‘Policy Basic details’ heading.
Step 3: On the next page, select the option ‘Login with MPIN’ or ‘Login with OTP’ option.
Step 4: Enter your mobile number, MPIN/OTP and click on the ‘Login’ button.
Step 5: Click on the ‘Policy Basic Details’ button under the ‘General Services’ heading.
Step 6: Enter the ‘Policy Number’, ‘Mobile Number’ and click on the ‘View Details’ button.
Step 7: The policy details will be displayed on the screen.
Contact number for queries related to the policy: 022-67819281 or 022-67819290 (Available from Monday to Friday between 10 a.m to 5:30 p.m)Email ID for queries related to the policy: firstname.lastname@example.org
PMVVY is a great investment option for senior citizens. This scheme can be considered by those senior citizens that are looking for a regular pension. However, to invest in this scheme, one should have a considerable amount in hand.
The interest rates keep changing. The government revises the interest rates for the policy every year. However, the rate for the current year will be the rate of interest at which the pension is paid for 10 years starting that year. Currently, the interest rates for FY21-22 for monthly pension payment is 7.40%, for quarterly pension payment is 7.45%, for half-yearly pension payment is 7.52% and yearly pension payment is 7.66%.
In case of a medical emergency (self and spouse), the subscribers can withdraw 98% of the purchase price.
Yes. A policyholder can invest in the scheme more than once. However, the total purchase price of an individual person under all the policies under this plan should not exceed Rs.15 lakh.
To pension payment above Rs.1,000, then you must pay more purchase price. For example: If you want to receive Rs.3,083 per month, you can buy the plan by paying the lumpsum of Rs.5,00,00. The pension is paid based on the rate of return/interest provided on the lumpsum amount invested. Currently, the rate of return is 7.40% p.a for monthly pension payment.
Thus, if you buy the plan by paying the purchase price of Rs.1,62,162 you will get a monthly pension of Rs.10,000. But if you pay the maximum purchase price of Rs.15,00,000, you get a monthly pension of Rs.9,250. Since the maximum limit of investment is 15,00,000, you can get a maximum monthly pension of Rs.9,250 at 7.40% p.a. under this scheme.
Yes. Under the revised PMVVY, the maximum investment limit has been changed from per family to per citizen per year. This means that a senior citizen can buy the policy by paying the maximum purchase price of Rs.15 lakh. Thus, both husband and wife can invest Rs.15 lakh each, if they are senior citizens.
In case the policyholder dies during the policy term, the death claim should be initiated by the beneficiary/nominee by informing the LIC branch office where the policy is existing. The beneficiary/nominee should submit the claim application with relevant documents. Once the claim application is submitted, the request will be processed and the LIC will return the purchase price.
The documents required to be submitted in death claims are:
In case of accidental or unnatural death, additional documents, such as police FIR, post-mortem report, hospital records and medical certificates may need to be furnished.
No. At the end of the policy term, maturity claims would be initiated by LIC only. The LIC will pay the purchase price along with the final pension instalment to the policyholder.