Pradhan Mantri Vaya Vandana Yojana: A reliable support for senior citizens

Respecting and caring for senior citizens has always been an important social value in our country. As age increases, the need for financial security and regular income increases even more. After retirement, many times the sources of income become limited, and in such a situation a scheme that assures regular income is no less than a boon. Understanding this need, the Government of India launched the Pradhan Mantri Vaya Vandana Yojana (PMVVY), which provides a strong financial support for senior citizens. Today we will talk about this scheme in detail, so that you can understand it easily and take advantage of it.

Table of Contents

What is the Prime Minister’s Vaya Vandana Scheme?

Pradhan Mantri Vaya Vandana Yojana is a pension scheme launched by the Government of India in May 2017. This scheme is specially designed for senior citizens aged 60 years or above. Its main objective is to give senior citizens a reliable source of regular income after retirement, so that they can remain financially self-reliant. This scheme is operated by the Life Insurance Corporation of India (LIC), which makes it even more reliable.

The specialty of this plan is that it guarantees a fixed return. Earlier this plan had a guaranteed 8% annual return, but as per recent updates, now this return is 7.4% per annum, which is paid on a monthly basis. This return is assured for a policy term of 10 years. If you understand it, this is a plan that not only gives regular income but also provides protection from market uncertainties.

Key features of the scheme

Let us understand some of the salient features of this scheme that make it so useful for senior citizens:

Fixed Pension: This plan gives you an annual return of 7.4%, which is paid on a monthly basis (equivalent to about 7.66% per annum). You can choose to receive pension on a monthly, quarterly, half-yearly or yearly basis.
10-year policy term: This plan lasts for 10 years. During this period, you will continue to receive regular pension. On completion of 10 years, you are returned your invested amount (premium)
Minimum and maximum investment: You can invest a minimum of Rs 1.5 lakh and a maximum of Rs 15 lakh in this scheme. The maximum investment limit is for one person, i.e. husband and wife can invest up to Rs 15 lakh each in this scheme.
Loan facility: If you need money in an emergency, you can take a loan up to 75% of the investment amount after 3 years of policy commencement. This facility makes the plan more flexible.
Premature withdrawal: If for some reason you have to exit the scheme early, you can do so after 1 year. However, in this case you may suffer some loss, as the amount is returned with a deduction of 2%.
Tax benefits: Although this plan is not eligible for tax exemption under Section 80C of the Income Tax Act, it is exempt from GST. This means that there is no additional tax on the premium you pay.

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Eligibility Criteria

There are some basic conditions to avail the benefits of this scheme, which are as follows:

Age: The applicant must be at least 60 years of age. There is no maximum age limit in this scheme, i.e. anyone above 60 years can invest in it.
Citizenship: The applicant must be a citizen of India.
Investment amount: Minimum investment is Rs 1.5 lakh and maximum investment is Rs 15 lakh.
Documents: You need to submit Aadhaar card, PAN card, age proof, residence proof, and retirement related documents (if applicable).

how to apply?

Investing in Pradhan Mantri Vaya Vandana Yojana is very easy. You can buy it both online and offline. Let us understand both the processes:

Online Application

Visit the official website of LIC (www.licindia.in) (www.licindia.in).
There choose the option of ‘Pradhan Mantri Vaya Vandana Yojana’.
Click on the ‘Buy Online’ button.
Enter your contact details and fill out the application form.
Upload the required documents like Aadhaar Card, PAN Card, and Bank Account Details.
Pay the premium online and submit the application.
Once the process is completed, you will receive the policy documents.

Offline Application

Go to the nearest LIC branch.
Take the PMVVY application form from there.
Fill the required information in the form and attach the documents.
Submit the form to the LIC branch and pay the premium.
Once the process is complete, you will receive the policy bond.

How much pension will I get?

The pension you receive depends on how much you invest and the mode of pension payment you choose. For example:

If you invest Rs 15 lakh and choose monthly pension, you will get around Rs 9,250 every month.
If you choose quarterly pension, you will get around Rs 27,750 every quarter.
Similarly, the amount will vary for half-yearly or yearly pension.

A calculator is available on the LIC website, through which you can estimate the pension based on your investments.

Benefits of the scheme

Regular Income: This plan assures regular income after retirement, which is very important for senior citizens.
Security: Since it is backed by LIC and Government, your investment is completely safe.
Flexibility: You can choose the mode of pension payment as per your convenience.
Maturity Benefit: After completion of 10 years period, you get your investment back, which you can reinvest
Emergency Facility: Loan and premature withdrawal facility helps you in emergencies.

Some things to keep in mind

Tax considerations: The pension you receive from this plan is considered as income, and may be taxable as per your tax slab.
Lock-in Period: This scheme is for 10 years, so you should plan to invest for the long term.
Limited returns: A return of 7.4% is good, but if you are looking for higher returns, you should consider other investment options as well.

Is this plan right for you?

If you are above 60 years of age and are looking for a safe, guaranteed return scheme, PMVVY may be a good option for you. It is especially useful for those who want to protect their savings after retirement and need regular income.

conclusion

Pradhan Mantri Vaya Vandana Yojana is a support for senior citizens, which not only provides financial security but also makes their life more respectable. This scheme comes with the credibility of the government and LIC, which makes it more reliable. If you or someone in your family wants to take advantage of this scheme, then visit the LIC website as soon as possible or contact your nearest branch.In today’s time, when market fluctuations are common, schemes like PMVVY are a stable and reliable option for senior citizens. So do not delay, learn more about this scheme and make your retirement more secure.