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What is Pradhan Mantri Vaya Vandana Yojana?
Pradhan Mantri Vaya Vandana Yojana (PMVVY) scheme provides social security cover to those aged 60 and above through an assured sum of pension every month. The scheme was launched in 2017 by the Government of India to provide an 8% pension to senior citizens against the lump sum amount deposited by an individual. The scheme is operated by the Life Insurance Corporation of India. It caters to the needs of post-retirement planning.
PMVVY policy details
Benefits of the policy
LIC operated the PMVVY on behalf of the Finance Ministry and the account can be created by either visiting any LIC branch offices or through LIC’s official website. Documents required for the process include identity proof, age proof and passport-size photographs.
- The holder must be 60 years or above; with no bar on the upper age limit
- The minimum purchase price of the policy is Rs 1,50,000 and the maximum investment allowed is Rs 15,00,000
- The interest rate for the year 2022-23 is 7.4%
- The pension can be sought monthly, quarterly, half-yearly or yearly basis
- The maturity tenure of the policy is 10 years
- The deposit can be withdrawn either on maturity, pensioner’s death or surrender of the policy
- Interest earned on the deposit money is taxable
- 75% of the deposit amount can be sought as a loan after 3 years of policy purchase
- A beneficiary can exit the policy within 15 days if he/she is not happy with the policy terms.
Benefits of the policy
- PMVVY has a higher interest rate than the interest rates provided by banks for fixed deposits.
- Provides a fixed source of income for up to 10 years for those aged 60 and above.
- The policyholder can get a loan up to a maximum of 75% of the purchase price after three years of the date of purchase.
LIC operated the PMVVY on behalf of the Finance Ministry and the account can be created by either visiting any LIC branch offices or through LIC’s official website. Documents required for the process include identity proof, age proof and passport-size photographs.