How to invest in Pradhan Mantri Vaya Vandana Yojana

Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a pension scheme available for senior citizens. The scheme offers a guaranteed payout of pension at a specified rate for 10 years. It also offers a death benefit in the form of return of purchase price to the nominee. This policy was open for a short period and was then extended to 31 March 2020.

Eligibility
Minimum entry age for this scheme is 60 years. There is no maximum age limit. The maximum investment allowed per person is Rs 15 lakh.


How to apply
A form needs to be fi lled up and requisite documents need to be attached along with the form. One can also invest in the scheme online at the following link: https://eterm.licindia.in/onlinePlansIndex/pmvvymain.do

Documents required

• Copy of PAN card.
• Copy of address proof (Aadhaar, passport).
• Copy of cheque leaf or first page of bank passbook of the account in which pension needs to be credited

Purchase price
The scheme can be purchased by payment of a lump sum purchase price. The pensioner can choose pension payout frequency from monthly, quarterly, half-yearly and yearly options. The minimum purchase price for yearly pension is Rs 1,44,578, whereas the maximum purchase price for the same is Rs 14,45,783. However in case of a monthly payout option, minimum purchase price is Rs 1.5 lakh and maximum purchase is Rs 15 lakh.

Premature withdrawal
The PMVVY scheme allows premature withdrawal only in the case of critical and terminal illness of self or spouse. However, only 98% of the purchase price is payable as surrender value in such a case.

Points to note

• Loan facility is available against PMVVY after three policy years. The maximum loan amount can¡¦t exceed 75% of the purchase price.
• The scheme does not offer tax benefits like other pension schemes of the government do.

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)