Pradhan Mantri Vaya Vandana Yojana (PMVVY)
Background and Nature of Scheme
- Type: Central Sector Scheme → fully funded and managed by the Central Government.
- Implementing Agency: Life Insurance Corporation of India (LIC).
- Eligibility: Exclusively for senior citizens (aged 60 years and above).
- Purpose: To provide a safe and assured pension income during old age, especially when market conditions are uncertain and interest rates are falling.
👉 In short, PMVVY is a pension-cum-insurance scheme that gives elderly people financial security and stability
Objectives
- To ensure social security in old age.
- To protect senior citizens against fluctuating interest rates in the market.
- To create a predictable stream of pension income, reducing financial anxiety in later life.
Salient Features
(i) Guaranteed Pension
- Subscribers receive a fixed pension for 10 years.
- At the end of the 10 years, the principal (purchase price) is returned.
- Pension amount:
- ₹1,000 per month (minimum)
- ₹12,000 per month (maximum)
- Based on the investment made.
(ii) Investment Limits
- Minimum investment: ₹1.56 lakh.
- Maximum investment: ₹15 lakh.
- The maximum pension ceiling applies to the family as a whole, which includes:
- The pensioner,
- His/her spouse,
- And dependents.
(iii) Tax Treatment
- No tax benefits (unlike many other small savings schemes).
- Only relief: GST exemption on the principal purchase price.
(iv) Premature Exit
- Generally, the scheme is designed for 10 years.
- But in case of critical or terminal illness of self or spouse → premature exit is allowed.
- On exit, there is a 2% penalty on the principal.
(v) Loan Facility
- Available after completion of 3 years of the policy.
- Maximum loan: 75% of the purchase price.
(vi) In Case of Death
- If the subscriber dies within the 10-year period, the entire principal is returned to the nominee/beneficiary
4. Significance
- Provides a reliable pension option in times when interest rates in fixed deposits and other savings instruments are falling.
- Acts as a safety net for senior citizens, ensuring dignity and financial independence.
✅ In summary:
The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a government-backed pension-cum-insurance scheme for senior citizens, implemented by LIC. With guaranteed pension, assured return of principal, loan facility, and provision for premature exit under special conditions, it stands as a secure retirement option for the elderly population of India.