Pradhan Mantri Vaya Vandana Yojana (PMVVY)

This article talks about Pradhan Mantri Vaya Vandana Yojana (PMVVY), a scheme offered by the Life insurance Corporation (LIC) of India that gives a guaranteed payout of pension at a specified rate for 10 years.

· 4 min read
Pradhan Mantri Vaya Vandana Yojana (PMVVY)

Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a retirement and pension scheme operated and managed by the largest life insurance provider of India i.e., Life Insurance Corporation of India (LIC). PMVVY is a retirement cum pension scheme, that aims to pay regular pensions to senior citizens. The scheme was launched by the Government of India for senior citizens, which was originally available from May 04, 2017, to March 31, 2021. The scheme was recently extended up to March 31, 2023. PMVVY is a very good alternative investment option when compared with the bank deposits. The amount invested by the investor of the scheme is known as the purchase price.


  • Time Period: The pensioner would receive a pension at the end of each period. The time period can be monthly, quarterly, half-yearly, and yearly, which will be chosen by the applicant at the time of policy purchase.
  • Loan against Investment: Loan can be taken against invested amount after completion of 3 policy years. The amount of loan can be a maximum of 75% of the invested amount.
  • Pension paid in bank account: The pension is transferred directly to the pensioner’s bank account through NEFT or Aadhaar Enabled Payment System (AEPS).
  • Maturity benefits: If the PMVVY policyholder survives till the end of the policy term of 10 years, the purchase price along with the final pension would be paid to him. If the policyholder dies during the policy term, the purchase price shall be refunded to the nominee of the deceased person.
  • Purchase Price (PP): The PMVVY scheme can be bought upon payment of a fixed purchase price.  The minimum and maximum purchase prices depending on the frequency and amount of pension payments.
MONTHLY Rs. 1,000 Rs. 1,62,162 Rs. 9,250 Rs.15,00,000
QUARTERLY Rs. 3,000 Rs. 1,61,074 Rs. 27,750 Rs. 14,89,933
HALF-YEARLY Rs. 6,000 Rs. 1,59,574 Rs. 55,500 Rs. 14,76,064
YEARLY Rs. 12,000 Rs. 156,658 Rs. 1,11,000 Rs. 14,49,086
  • Minimum Age: The applicant of this scheme must be above the age of 60 years. There is no maximum age limit.
  • Premature Withdrawal: On withdrawal of the investment before maturity, 98% of the invested amount would be provided to the policyholder. This is applicable in circumstances such as terminal or critical illness of self or spouse.
  • Interest Rate: As of 2021, PMVVY offers 7.4% p.a. interest compounded monthly.
  • Taxability: The pension received under this scheme is added to total annual income and tax is applied based on the income tax slab of the policyholders.

Application Procedure

Online Procedure:

  • Log in on the website of LIC
  • Select Pension Plans under products and press proceed
  • Fill up the relevant application form
  • Submit the online application form and upload the documents as per the requirements of the application form

Offline Procedure:

  • Collect the application form at any branch of LIC
  • Fill the application form
  • Submit the duly filled application form by attaching all requested and relevant documents

Documents Required

The various documents required to subscribe under this scheme are:

  • Aadhaar card
  • Pan card
  • Income certificate
  • Passport size photo
  • Age certificate
  • Bank passbook details
  • Mobile number
  • Documents showing the proof of retirement for the applicant

Benefits of PMVVY

  • This scheme offers an assured rate of return of 7.40% per annum
  • The scheme is exempted from GST
  • Loan up to 75% of the purchase price is allowed after 3 years of subscribing to the policy.
  • The scheme also allows for premature withdrawal of the invested amount, though only 98% of the purchase price shall be refunded.
  • On the death of the policyholder, the purchase price is refunded to the beneficiary.
  • The entire amount (final pension and the purchase price) would be paid out once the policy term of 10 years is completed.
  • Pension is payable at the end of each period as per the frequency (monthly, quarterly, semi-annually, yearly) chosen by the policyholder at the time of purchase.

PMVVY Vs. Senior Citizen Saving Scheme (SCSS)

  • Service Provider: PMVVY is an initiative by LIC and thus be availed online or offline through LIC, whereas SCSS can be availed from the post office or any bank.
  • Policy term: The tenure of PMVVY is 10 years, whereas the tenure of SCSS is 5 years, with an option to extend it for further 3 years. SCSS has less tenure, thus gives more flexibility to the applicants.
  • Availability: PMVVY is available only up to March 31, 2021, while SCSS can be availed at any time.
  • Payment Frequency: Under PMVVY, the applicant has 4 options regarding the frequency of payouts i.e., monthly, quarterly, half-yearly, annual payouts. SCSS has only one mode of payout i.e., every quarter.
  • Interest Rate: The investment yield of both schemes changes quite frequently, therefore they should be compared with respect to their present interest rates and not past.
  • Loan Facility: Under PMVVY, a loan can be availed against this scheme after the completion of 3 years of the scheme. The loan amount offered is 75% of the purchase price. But under SCSS, no loan facility is allowed.
  • Premature Closure: Under PMVVY, premature closure of account is not possible except under emergency situations, where 98% of the invested amount is paid on premature withdrawal. Under SCSS, premature closure is allowed only after the completion of 1 year of this scheme. If the amount is withdrawn within 2 years of opening the account, 5% of the deposited amount is deducted as a penalty and if the amount is withdrawn between 2-5 years of opening the account, 1% of the deposited amount is deducted as a penalty.
  • Income Tax benefits: Under PMVVY, no tax benefits are allowed. The pension received is fully taxable. Under SCSS, deduction under Section 80C of the IT Act, 1961 is applicable.

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