PMVVY: an attractive pension scheme for senior citizen

Pradhan Mantri Vaya Vandana Yojana has gained popularity over past two years. However, as the scheme is new and has multiple layers to it. The common questions I am asked on Pradhan Mantri Vyay Vandan Yojana are as follows –

What is the benefit of Pradhan Mantri Vaya Vandana Yojana? Is PM Vaya Vandana Yojana still available? What is the interest rate of PMVVY? Who is eligible for PMVVY? What is the disadvantage of PMVVY? Lets look at the answers.

Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a pension scheme for senior citizens (age 60 years and above) launched by the Government of India in 2017. The scheme is implemented through the Life Insurance Corporation of India (LIC).

Under this scheme, senior citizens are provided with a guaranteed return of 8% per annum payable monthly for a policy term of 10 years. The scheme offers pensioners the option to choose their pension payout frequency as monthly, quarterly, half-yearly, or yearly. Additionally, the scheme also allows for premature withdrawal of the entire purchase price along with accrued interest after completion of three policy years in the event of critical or terminal illness of self or spouse.

To apply for PMVVY, you can visit any of the designated branches of Life Insurance Corporation of India (LIC) or any other channel through which LIC sells its products. The application form for PMVVY can also be downloaded from the LIC website and submitted along with the relevant documents at the nearest LIC branch office.

Advantages of PMVVY:

1. Guaranteed returns: The scheme offers a guaranteed return of 8% per annum for a policy term of 10 years, providing financial security to senior citizens.
2. Flexible payout options: The scheme offers pension payout options as monthly, quarterly, half-yearly, or yearly to suit the financial needs of the pensioner.
3. Premature withdrawal option: In the event of critical or terminal illness of self or spouse, the scheme allows for premature withdrawal of the entire purchase price along with accrued interest after completion of three policy years.
4. Loan Facility: The scheme also offers a loan facility after the completion of three policy years, which can be up to 75% of the purchase price.
5. Death Benefit: In case of the demise of the policyholder, the purchase price is refunded to the nominee.

Disadvantages of PMVVY:

1. Age limit: The scheme is available only to senior citizens who are 60 years or older, limiting its accessibility to younger individuals who may also require financial security in their old age.
2. Limited policy term: The policy term of the scheme is limited to 10 years, which may not be sufficient for individuals who require a longer period of financial security.
3. Low liquidity: The scheme does not offer easy liquidity as premature withdrawal is allowed only in case of critical or terminal illness of self or spouse after three policy years.

It is an attractive pension scheme for senior citizens in India, providing them with financial stability and peace of mind. One can apply for Pradhan Mantri Vaya Vandana Yojana (PMVVY) both online and offline through the Life Insurance Corporation of India (LIC) website or at any of its branches. Here’s how you can apply for PMVVY:

Online application process:

1. Visit the LIC website (www.licindia.in) and click on the ‘Buy Policy Online’ option.
2. Select ‘Pradhan Mantri Vaya Vandana Yojana’ from the list of policies and click on ‘Buy Now.’
3. Fill in the required personal and policy details, and select the payment option.
4. Once the payment is made, a confirmation message will be sent to your registered mobile number and email ID.
5. The policy documents will be sent to your registered address.

Offline application process:

1. Visit any LIC branch office and collect the PMVVY application form.
2. Fill in the form with the required personal and policy details.
3. Attach the necessary documents such as age proof, identity proof, address proof, and a passport-sized photograph.
4. Submit the completed application form and documents at the LIC branch.
5. Pay the premium amount through cash, cheque or demand draft.
6. Once the payment is made, the policy documents will be issued.

Remember to read and understand the policy document carefully before applying for PMVVY, and to provide accurate information to avoid any complications in the future.