Pradhan Mantri Vaya Vandana Yojana (PMVVY) pension scheme, meant for senior citizens, is available only till March 31, 2020. This immediate annuity LIC pension scheme can provide them with a steady income after retirement. Citizens above 60 years of age can invest in this scheme which offers a guaranteed monthly income of up to Rs 10,000 for 10 years. Apart from this, it also offers a death benefit in the form of the return of purchase price of the scheme to the nominee.
Currently, the Government has not extended the last date to avail this scheme beyond March 31, 2020. So, if you are a senior citizen and have a lump sum money in your bank account then you can consider buying this immediate annuity scheme before March 31.
An immediate annuity scheme is a contract under which an insurer agrees to give the purchaser i.e. the pensioner a fixed amount of money per month or as per a pre-set frequency, starting immediately after purchase of the pension plan scheme. Here are some important details of the scheme:
Eligibility criteria and other conditions:
- Minimum entry age: 60 years (completed)
- Maximum entry age: No limit
- Policy term: 10 years
- Minimum pension: Rs 1000 per month
- Maximum pension: Rs 10000 per month. The total amount of pension allowed per senior citizen should not exceed the maximum pension limit.
Mode of pension payment
The modes of pension payment are monthly, quarterly, half-yearly and yearly. The pension payment is processed through NEFT or Aadhaar Enabled Payment System. Thus, depending on the mode of pension payment, that is, monthly, quarterly, half-yearly or yearly, the first instalment of pension will be paid after a month, three months, six months, or a year from the date of purchase of the scheme respectively.
The scheme can be purchased by investing a lump sum in PMVVY pension scheme in the following manner and accordingly you will get the pension income.
| Mode of Pension | Minimum annuity purchase price | Minimum pension income | Maximum annuity purchase price | Maximum pension income |
| Yearly | Rs 1,44,578 | Rs 12,000 | Rs 14,45,783 | Rs 1,20,000 |
| Half-yearly | Rs 1,47,601 | Rs 6,000 | Rs 14,76,015 | Rs 60,000 |
| Quarterly | Rs 1,49,068 | Rs 3,000 | Rs 14,90,683 | Rs 30,000 |
| Monthly | Rs 1,50,000 | Rs 1,000 | Rs 15,00000 | Rs 10,000 |
How to buy PMVVY pension scheme
You can buy PMVVY pension scheme from Life Insurance Corporation of India (LIC) of India. You can purchase the scheme either offline or online. If you want to purchase it offline, you must visit the nearest LIC office. However, if you want to purchase the annuity scheme online, log on to www.licindia.in website.
Other benefits
Maturity benefit: If the pensioner survives till the end of the policy term of 10 years, purchase price of the annuity along with final pension installment will be payable to the policyholder.
Death benefit: If the pensioner dies during the policy term of 10 years, the purchase price of the annuity scheme will be refunded to the beneficiary.
You can avail loan facility
You can avail the loan facility after completing three policy years. The maximum loan that can be granted will be 75 percent of the annuity purchase price. The rate of interest to be charged for the loan amount is determined at periodic intervals.
Also, the loan interest will accrue as per the frequency of pension payment under the policy and it will be due on the due date of pension. The loan outstanding will be further recovered from the claim proceeds at the time of exit.
Points to note
This LIC pension scheme does not provide tax deduction benefit under section 80C of the Income Tax Act. This means that the amount invested in the scheme cannot be claimed as a deduction from income under section 80C to reduce tax liability in the year of investment. Returns from the scheme are also taxable as per income tax laws. applicable from time to time. The scheme is however exempted from Goods and Services Tax (GST).
In case you want to exit the scheme before the end of the policy term, you can do so only in special situations. The scheme allows premature exit under exceptional circumstances like the pensioner requiring money for the treatment of a critical/terminal illness of self or spouse. In such a case, the 'Surrender Value' payable is 98 percent of the annuity purchase price.