PM Vaya Vandana Yojana To Avail Higher Pension Closes On 31 March 2020: How To Invest?

The Indian government's Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a pension scheme that offers up to 8.5 percent returns. The policy is open till 31 March 2020 and offers guaranteed pension payout at a specified rate for a period of 10 years. It also provides a death benefit to the nominee in the form of a return of purchase price.

Benefits of PMVVY

• Pension in arrears (at the end of each period as per mode chosen) shall be payable to the pensioner during the policy term of 10 years.
• On the death of the pensioner during the policy term of 10 years, the "Purchase Price" shall be refunded to the beneficiary.
• On maturity, the surviving pensioner will receive purchase price along with final pension installment at the end of 10 years.
• Premature exit is allowed during the policy term under exceptional circumstances like the treatment of any critical/terminal illness of self or spouse. The Surrender Value payable in such cases shall be 98 percent of "Purchase Price".
• On completion of 3 years of the policy, the pensioner can avail a loan against the policy for up to 75 percent of the "Purchase Price." Loan interest will be recovered from the pension payment.

Eligibility

Minimum entry age is 60 years. There is no maximum limit.

Policy term

10 years

Minimum pension

• Rs 1,000 per month
• Rs 3,000 per quarter
• Rs 6,000 per half-year
• Rs 12,000 per year

Maximum Pension

• Rs 10,000 per month
• Rs 30,000 per quarter
• Rs 60,000 per half-year
• Rs 1.2 lakh per year

Purchase price

The scheme can be purchased by payment of a lump sum "Purchase Price". One can either choose the amount of pension or the Purchase Price.

Mode of Pension	Minimum Purchase Price (Rs)	Maximum Purchase Price (Rs)
Yearly	1,44,578	14,45,783
Half-yearly	1,47,601	14,76,015
Quarterly	1,49,068	14,90,683
Monthly	1,50,000	15,00,000

The purchase price will be rounded to the nearest rupee.

Pension payment

Pension will be paid through NEFT or Aadhaar Enabled Payment System to the pensioner's bank account on a monthly, quarterly, half-yearly or yearly basis.

Pension rates

According to LIC's website, pension rates for Rs 1,000 Purchase Price for different modes of pension payments are as below:

• Yearly: Rs 83.00 p.a
• Half-yearly: Rs 81.30 p.a
• Quarterly: Rs 80.50 p.a
• Monthly: Rs. 80.00 p.a

How to apply for PM Vaya Vandana Yojana?

LIC of India is the sole operator of this scheme. One can apply for the PM Vaya Vandana Yojana scheme online on licindia.in with copies of PAN, address proof (aadhaar or passport) and the first page of bank passbook/cheque leaf of the account to which the pension would be credited.

Taxes

There are no tax benefits like those given to other popular government-backed schemes.