Pradhan Mantri Vaya Vandana Yojana (PMVVY) 2020-21: Eligibility, Online registration, Features, and Benefits

Pradhan Mantri Vaya Vandana Yojana is an insurance policy-cum- pension scheme that provides alternative avenues of income to senior citizens of the country.

Backed by the Indian government, this pension plan is provided by Life Insurance Corporation (LIC) which caters to one’s need for post-retirement financial planning.

Individuals, more than 60 years of age can avail of this scheme. PMVVY, which was earlier available from 4th May 2017 to 31st March 2020, was recently (Govt. Press Release dated May 20, 2020) extended by the government for another three financial years till 31st March 2023.

PMVVY gives a guaranteed pension payout at a specified rate for 10 years. This scheme will provide an assured return of 7.4 percent per annum which will be payable monthly for the entire duration of 10 years.

Features and Benefits of PMVVY:

Retirement financial security via pension payment

Under Pradhan Mantri Vaya Vandana Yojana, individuals who have availed this pension plan are allowed to receive a fixed amount at the end of a certain period chosen by an individual for a maximum term of 10 years.

 Assurance of returns

PM Vaya Vandana Yojana will initially provide an assured rate of return of 7.40 % per annum for the year 2020-21 per annum and thereafter to be reset every year.

 Periodic payout options

Individuals can opt for monthly, quarterly, half-yearly, or annual payout with the plan as per their financial requirements and convenience. The first payment must be performed immediately after plan purchase, depending on one’s chosen payment mode.

For example, if a pensioner has chosen a quarterly mode of payment, he/she should receive the first payment within 3 months from the date of policy purchase.

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 Maturity benefit

Pradhan Mantri Vy Vandna Yojna also comes with the maturity benefit of receiving a lump sum purchase price of the plan along with the last installment payout. This facility is valid on the survival of a pensioner until this policy tenure’s end.

 Death benefit

In the event of a pensioner’s death during the policy term, his/her beneficiary is entitled to receive an entire purchase amount as a claim on submitting required documents.

 Surrender value

Considering the monetary requirement to avail the treatment of critical illnesses for self or spouse, this scheme also allows a pensioner to surrender the policy. Policyholders can receive 98% of the purchase value during premature exit from the policy term.

 Loan facility

After completing 3 successful policy years, individuals can avail loan against a Pradhan Mantri Vaya Vandana Yojana investment. Pensioners can borrow a maximum of 75% of the purchase amount as a loan.

Interest calculated on loan is recovered from the pension payment as per the chosen frequency of loan repayment. The interest payable gets due on the pension payment date.

Furthermore, during maturity or surrender, loan outstanding will be recovered from its claim amount.

 Exclusion

The pension-cum-insurance scheme also comes with a unique exclusion to this policy’s purchase price return. Under this exclusion, the entire purchase price is payable if a policyholder commits suicide.

Eligibility Criteria for the PM Vaya Vandana Yojana:

Individuals can purchase Pradhan Mantri Vaya Vandana Yojana only after meeting the eligibility criteria determined by the government. Here is a list of criteria one needs to fulfil elucidated in a tabular format.

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Application Process of the PMVVY Scheme:

Individuals can buy Pradhan Mantri Vaya Vandana Yojana both offline and online from Life Insurance Corporation of India.

 Offline

To purchase this scheme through the offline mode, individuals need to approach the nearest or preferred branch of LIC. After deciding the preferred purchase price or pension payment, individuals need to fill up the application form and submit it along with the required documents and the chosen amount.

 Online

For a hassle-free application process, individuals can apply for Pradhan Mantri Vaya Vandana Yojana online through the following steps.

 Step 1: Visit the official website of the Life Insurance Corporation of India.

 Step 2: Next, click on the “Pradhan Mantri Vaya Vandana Yojana” option.

 Step 3: A new tab will open with four different options. Now, click on the designated button no. 842 for the ‘Buy Online’ option. A new page will appear on the screen where you have to select the ‘Click to Buy Online’ option on the left side corner of the page.

 Step 4: In the next step, create an Access ID to proceed further. Provide contact details such as name, email ID, mobile number, date of birth, address, and servicing unit to generate the ID. You will receive this 9 digit Access ID either by SMS at the registered mobile number or through email.

 Step 5: Next, submit the Access ID and hit the ‘Proceed’ button to go forward with the application.

 Step 6: At last, after selecting the preferred pension plan under Pradhan Mantri Vaya Vandana Yojana, fill up the application form, and upload scanned copies of the required documents, and make payment.


Required Documents to Apply:

To apply for the pension scheme, individuals need to submit a handful of essential documents like –

 Aadhaar card
 PAN card
 Details of the preferred bank where the pensioner wants the pension to be credited every month.