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LIC PM Vaya Vandana Yojana Pension Plan New updates and features, benefits of PMVVY

Pradhan Mantri Vaya Vandana Yojana Pension Plan. 

LIC on May 26, 2020, has introduced the modified PMVVY pension scheme for senior citizens. PM Vaya Vandhana Yojana Pension Plan (PMVVY) is a type of pension plan for senior citizens in India. This Plan was open till 31 March, 2020. Now this scheme has been extended for 3 years till 31st March 2023. LIC is managing this scheme and has described as Plan no 842.

Major Changes announced in PMVVY in 2020  

  • The scheme has been extended for 3 years till 31st March 2023.
  • The revised interest rate for 2020-2021 is 7.4 percent.
  • The Maximum pension one can receive is Rs 10,000 per annum. Also, the single premium has been increased to Rs 1,56,000 from 2020 onwards.
  • PMVVY interest rates are linked with Senior Citizen saving schemes.

Features of PM Vaya Vandana Yojana Pension Plan

·         The policy term of this pension plan is 10 years. The pension rate is 7.4 percent per annum payable monthly which is equivalent to 7.66 percent p.a. 

·         The pension rate will be revised at the beginning of the financial year. One can apply to this pension plan before the closing on 31 March 2023.

·         The minimum entry age to apply this plan is 60 years completed and no maximum entry age limit.

·         There are various pension plans by investing in single premiums and would receive pension monthly, quarterly, half-yearly, or yearly.

·         The pension scheme can be brought by investing a lump sum purchase price. The first installment of the pension plan is to be paid after 1 year, 6 months, 3 months or 1 month starting from the date of purchase.

·         For surrender of this policy various terms and conditions are there. The premature exit of this scheme can be surrender if any critical illness arises. The surrender value payable to pension will be 98 percent of the purchase price.

·         The maximum pension of Rs 10,000 per month would be received if the investment of Rs 15 lakhs had been done on PMVVY. Minimum pension of Rs 1000 if an investment of Rs 1.5 lakhs.  The pension amount is directly credited to the Savings bank account. A maximum of Rs 15 lakhs can be invested in this scheme only for senior citizens.

Advantages in PMVVY Pension

  •  An assured return of 7.4 percent would be provided for the tenure of 10 years. It is providing higher returns than saving accounts.
  • In case of death of the pensioner during the term going off the plan, the nominee or legal heirs would receive the single premium purchase price of the scheme.
  • The guaranteed pension amount would be received during the pension plan depending on the selection of pay-out monthly, quarterly, half-yearly, and yearly.
  • Maturity benefit would be provided if the person services till the end of the pension plan. The beneficiary would receive the purchase price and the last installment of the pension amount.
  • A loan up to 75 percent of the premium paid can be received after completing 3 years. The interest would be deducted directly from the pension amount.

 

Disadvantages in PMVVY Pension Plan

  • There are no tax benefits while investing in this pension scheme. The pension amount received is according to their income tax slab.
  • You can withdraw money quickly in this plan unless you are having any special medical conditions.
  • The Maximum pension amount received is Rs 10000 per month which will be not feasible in current situations where the inflation is increasing day by day.

 

How to Invest in PMVVY Pension Plans

You can invest in this pension plan offline via LIC nearest office or Online from LIC website

To apply for this pension scheme, you need to submit various documents mention below

-             Aadhaar card

-             PAN card

-             Savings Bank account details where the pension would be credited.

 

Final Thought

As the interest rates of FDs, various saving schemes are going down slowly one can invest in PMVVY pension schemed which will provide a guaranteed return for the next 10 years. The senior citizen can invest those who are not willing to take more risks and want to fix the pension amount. It would be better for those investors who are in a lower tax bracket and looking for a simple investment product.

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