Home General Insurance What is the Pradhan Mantri Vaya Vandana Yojana (PMVVY)?

What is the Pradhan Mantri Vaya Vandana Yojana (PMVVY)?

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Pradhan Mantri Vaya Vandana Yojana

The Indian government has a pension program available from May 4, 2017, to March 31, 2020. The Pradhan Mantri The Indian government increased the Vaya Vandana Yojana maximum cap to Rs. 15 lahks in the 2018-2019 Budget Speech. The plan is available for offline and online purchases from the Life Insurance Corporation (LIC) of India. The fundamental goal of the program is to give retirees a regular income during a period of falling interest rates.

Read More: What is Pradhan Mantri Mudra Yojana?

Pradhan Mantri Vaya Vandana Yojana Eligibility

The following is a list of the conditions that applicants must meet to be eligible for the PMVVY program:

  • A minimum age of 60 is required for admission.
  • Entry age maximum: There is no upper age limit.
  • Tenure of the policy: The policy has a ten-year term.
  • Minimum retirement benefit: The minimum pension amounts are Rs. 1,000, Rs. 3,600, Rs. 6,000, and Every month, quarter, half-year, and year are equal to Rs. 12,000, correspondingly.
  • A maximum pension that can be earned: The maximum pension that can be made for a month, quarter, half-year, and annually, respectively, is Rs. 10,000, Rs. 30,000, Rs. 60,000, and Rs. 1,20,000.
  • Benefits of the Pradhan Mantri Vaya Vandana Yojana Programme

The following are some advantages of the PMVVY program:

The pensioner will benefit from the plan’s guaranteed return of 8% p.a. during the policy’s ten-year term.

Pension Payment: The pension will be paid in arrears if the retiree lives beyond the policy’s expiration date. The pensioner also gets a choice in the payment method.

Death benefit: If the pensioner passes away during the policy’s term, the beneficiary will receive the purchase money returned.

The benefit of Maturity: The purchase amount will be paid along with the final pension installment if the pensioner lives out the whole policy tenure.

Loan facility: After the policy has been in operation for three years, the pensioner may use loans that are secured by the insurance. You can get a loan for up to 75% of the buying price. The interest on the borrowing will be covered by the pension contribution that is being offered. If a loan has been approved as of 30 April 2018, the interest rate is 10% p.a. and it is due every six months for the duration of the insurance.

Open-ended window The policyholder has 15 days to terminate the insurance if they are unhappy with the terms. Nevertheless, the free-look period is 30 days if the insurance is purchased online. The buyer will receive the purchase price back once stamp duties have been deducted.

Payment methods for pensions

The various available payment methods include monthly, quarterly, half-yearly, and annual options. Pension payments must be made through NEFT or the Aadhaar Enabled Payment System (AEPS).

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

Pradhan Mantri Vaya Vandana Yojana program’s taxes

If the Indian government or another constitutional tax authority imposes any statutory taxes, they will do so by the applicable tax laws and tax rates. The amount of tax paid will not be considered in determining the benefits that are payable under the PMVVY scheme.

Exiting the Pradhan Mantri Vaya Vandana Yojana program too soon

The only situation when early termination of the insurance is permitted is when the policyholder or his or her spouse needs the money to treat a terminal or severe disease. The Surrender Value shall be equal to 98% of the Purchase Price.

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Pradhan Mantri Vaya Vandana Yojana scheme fraud

Within three years LIC may notify the insured in the event of any fraud involving the insurance.

the day the policy was put into effect.

when the risks started, in time.

the period starting with the policy’s revival.

whichever comes later: the day the rider was included in the policy.

The insurer must also explain why a specific action was taken against the insured, his/her legal representative, or nominees, and must do so in writing. Fraud in these situations refers to any action taken by the insured or his/her representative to mislead the insurer.

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