Pradhan Mantri Vaya Vandana Yojana (PMVVY) – Know its Coverage, Eligibility, & Advantages!

The Pradhan Mantri Vaya Vandana Yojana offers older inhabitants of the nation alternate sources of income. It functions as both an insurance scheme and a pension. The (LIC) Life Insurance Corporation, which is supported by the Indian government, offers this pension scheme, which satisfies the demand for financial planning after retirement.

This program is available to anybody over the age of 60. The government extended the PMVVY program for a further three fiscal years, ending on March 31, 2023. The program had previously been accessible from 4th May 2017 to 31st March 2020.

PMVVY offers a 10-year, fixed-rate pension payment that is guaranteed. For the entire ten-year period, this plan will guarantee a return of 7.4% per year, which will be paid out monthly.

Advantages of the PMVVY Scheme

The main goal of this government-sponsored program’s introduction was to safeguard older individuals by giving them money when they reached retirement age. Learn more about the PMVVY scheme’s advantages and features by reading this complete section.

Retirement Benefits

If a pensioner lives to the end of a 10-year insurance term, he or she will get a pension according to the selected method.

Maturity Benefits

Similar to pension benefits, the purchase price and the last pension instalment are paid to a pensioner who survives the 10-year insurance term.

Guaranteed Return

With this plan, the interest rate is guaranteed for the whole 10-year insurance term. Depending on the pension payment option chosen, this pension payout may be different.

Funeral Benefits

An applicant’s investment amount, or purchase price, will be returned to the beneficiary if he or she passes away during the 10-year insurance term.

Loan Service

Senior citizens who have completed three policy years are eligible for credit facilities under this program. In this case, a loan facility with a maximum loan amount of 75% of the purchase price is offered. For instance, if you invested INR150,000 in this program, after three years you would get INR 112,500 (75% of INR 150,000).

Give up the Chance

With the PMVVY Scheme, applicants are permitted to cancel their policies before their maturity. If the subscriber needs money to pay for medical costs related to a spouse’s or their own severe or terminal health issues, for example, this possibility may be made accessible under certain circumstances. A pensioner may withdraw 98% of the purchase price in such cases.

People will find it easier to grasp the application procedure now that they are aware of the necessary paperwork and qualifying requirements.

Key Highlights of the Scheme

Pension payments provide retirement financial security

By the PMVVY Scheme, those who have enrolled in this pension plan are eligible to receive a set sum after a period they choose, up to a maximum duration of 10 years.

No-cost Lock-in Period

If a person purchases a policy online, they have 30 days from the date of delivery to return it if they are not satisfied with the terms and conditions stated in the contract. However, for offline purchases, the free lock-in period lasts for 15 days beginning on the day the policy was bought. When returning this policy, a justification for the objection must be included as well.

The total purchase price must be returned during the free lock-in period, less any applicable stamp duty or released pension payout.


A special exception to this policy’s purchase price return is included with the pension-cum-insurance plan. According to this exclusion, if a policyholder dies by suicide, the entire purchase price is due.

Options for Regular Payments

According to their financial needs and convenience, people can choose to receive their payouts from the plan monthly, quarterly, half-yearly, or annually. Depending on the payment method selected, the first payment must be made as soon as the plan is purchased. For instance, if a pensioner has selected a quarterly payment schedule, the first payment should be sent no later than three months from the day the policy was purchased.

Eligibility Condition to be met

To qualify for the Pradhan Mantri Vaya Vandana Yojana, a person must meet the requirements listed below:

  •       To qualify for the program, he or she must be at least 60 years old.
  •       The policy should have a ten-year duration.
  •       The senior citizen investment cap should be Rs. 15 lakhs.
  •     The monthly minimum pension should be Rs. 1,000 and the maximum pension should be Rs. 10,000.

Important Characteristics of the Pradhan Mantri Vaya Vandana Yojana

Only those 60 years of age or older are eligible to join PMVVY. Providing set dividends on a monthly, quarterly, half-yearly, or annual basis for a period of ten years, the PMVVY is a pension fund for older adults. The pension benefit you would want to obtain or the price at which you may purchase PMVVY can both serve as considerations for shareholders when making investment decisions.

The total investment any senior may make in PMVVY is capped at Rs. 15 lakhs, and the highest monthly pension each senior can receive from PMVVY is Rs. 9250. As a result, if both couples are older than 60, the highest monthly pension with a family contribution of Rs. 30 lakhs might be Rs. 18,500. The investor’s age has no bearing on the pension under the PMVVY.

A lower investment interest rate than before would be offered by the upgraded PMVVY. The updated PMVVY’s interest rate varies based on the financial year (FY) in which the investment is made, in contrast to the earlier form of the PMVVY.

The government has stated that the interest rate due under the 10-year program would be 7.4% per month, or 7.66% per year, for investments made between the fiscal year 20-21 to March 31, 2021. The government will declare the interest rate of the PMVVY at the start of each fiscal year for investments made in the upcoming two fiscal years, 2021–2022 and 2022–2023.

The Registration Process of the PMVVY Scheme

This policy is enrollable by senior persons both online and offline. The policy is solely offered by LIC, as was previously noted. The steps to enrol in the PMVVY Policy are as follows:

Offline Method:

  •       Make contact with the LIC office’s local branch.
  •       As an alternative, you can also contact a local LIC Agent.
  •       Request the applicable policy application form.
  •   Fill out the form carefully and submit all required supporting papers. After receiving your fully certified application, LIC will process it and send the insurance document to your communication address.
  •       Additionally, you can manage your policy online at the eLIC portal.

Through Online Method

For the purpose of purchasing and managing insurance policies, LIC maintains an online site called eLIC.

  •       Sign up and log in to the eLIC portal.
  •       Select the PMVVY product from the Pension Plans tab.
  •       Go to the “buying” option, which will bring up the application form.
  •       Complete all of the information requested in the fields provided.
  •       Include scanned copies of all the supporting documents.
  •       Submit your application and the initial premium payment.
  •     The application will be reviewed, and your communication address will get the policy paper.

Payment methods for pensions

The payment methods that are offered include monthly, quarterly, half-yearly, and annual options. Pension payments must be made using the Aadhaar Enabled Payment System (AEPS) OR NEFT.

The initial transfer needs to be made within a certain amount of time after the insurance was purchased—either one month, three months, six months, or a year, depending on the payment method.

Taxes associated with the PMVVY program

If there will be any Statutory Taxes, they will be following the applicable tax rules and tax rates, whether they were imposed by the constitutional tax authority of India or the Indian Government. The amount of tax paid will not be taken into consideration for calculating benefits that are due under the PMVVY program.

Early termination of the PMVVY program

The sole situation in which early withdrawal from the insurance is permitted is when the policyholder or his or her spouse needs the money to treat a terminal or serious disease. 98% of the purchase price serves as the necessary surrender value.

Required Papers for the PMVVY Scheme

The required paperwork for PMVVY Scheme may be found here. –

Aadhaar Card

Age Verification

Evidence of Residence

Passport-size picture of the aspirants

Documentation or a declaration that is pertinent and attests to the applicant’s retirement

What kind of pension payment system is it?

Monthly, quarterly, half-yearly, or annual pension distribution choices are available. Depending on the payment method you choose, such as annual, half-yearly, quarterly, or monthly, the first pension instalment will be received 1 year, 6 months, 3 months, or 1 month after the day the pension was purchased.

Investment in PMVVY at its maximum

The policyholder has a maximum investment limit of Rs. 1.5 lakhs under the PMVVY program. Primary investors are subject to this cap. You need to make a minimum investment of 1.5 lakhs to be eligible for the scheme’s return of 1,000 each month.

Final Words

The risk-free investment option PMVVY is ideal for retirees over the age of 60. For retired persons, the pension from this plan provides a reliable source of income to cover their needs. However, one needs to have access to enough liquid cash to invest in this program.


Who is eligible to invest in the PMVVY?

The aspirant must be a resident of India. The PMVVY plan has no maximum age restriction. The aspirant must also be prepared to purchase a ten-year coverage. It has a purchase requirement of Rs 1.5 lakh and gives a Rs 1,000 monthly pension.

Is PMVVY a secure scheme?

You never know; given the exceptional circumstances we are in, coupled with the slowness brought on by the pandemic, interest rates might continue to decline in the future. Thus, your choice of investments should be based on your level of risk tolerance. The first option you should make if you’re a risk-averse investor seeking a long-term monthly income strategy is PMVVY. Bank FDs are thus placed after POMIS & SCSS.

What are the several ways I may invest in the plan?

Both online and offline investments are accepted in the plan. If you want to make an online investment, go to the ‘Pension Plans’ area of the official LIC website. You can submit the application form in person at any LIC office if you choose the offline mode.

What exactly does the PMVVY pension plan entail?

Life Insurance Corporation (LIC) of India is the only provider of the PMVVY plan. For ten years, the plan guarantees a certain rate of pension payout. A refund of the purchase money is provided to the nominee as a death benefit.

Is the policy chosen for this program subject to cancellation? What conditions apply for surrender under this plan?

This design allowed for the surrender of the insurance at any time throughout the policy duration. They may give it up in exceptional circumstances, such as when a retiree needs money or when they or their spouse need to get medical attention.

Do taxes apply to the PMVVY Scheme?

By section 80C of the Income Tax Act, the PMVVY plan does not offer a tax deduction advantage. The scheme’s profits will be taxed by current tax regulations. The Goods and Services Tax (GST) is not applied to the program.

Does this pension plan’s interest rate have a set fixed rate?

Yes, the interest rate is set at between 8 and 8.30% annually. The government has set the interest rate independent of market instability to offer older citizens with financial security.

Any senior can access SCSS, right?

A savings option available to people over 60 is the Senior Citizens Savings Scheme (SCSS), which is endorsed by the government. For SCSS to mature, five years are needed. A person must be at least 60 years old to create a SCSS account.

How are the loan principle and interest recovered under this plan?

The loan’s principal will be repaid from the remaining balance of the pension that the policy will pay out. The frequency of pension payments under the agreement, which are due on a pension due date, will determine how often loan interest will accumulate. However, the remaining debt must be paid back from the claim’s earnings at the time of exit.