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Pradhan Mantri Vaya Vandana Yojana Research Team | Posted On Monday, May 06,2019, 06:04 PM

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Pradhan Mantri Vaya Vandana Yojana



The Pradhan Mantri Vaya Vandana Yojana is a pension plan for retirees who are above 60 years of age. The scheme is meant for senior citizens and provides an assured return of 8% a year for 10 years. The subscribers can choose from the different modes of payment which are monthly, quarterly, half-yearly and annually. The scheme is operated under LIC of India and can be purchased offline or online via the LIC website.

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Pradhan Mantri Vaya Vandana Yojana


  • There is no upper limit on the maximum entry age.
  • Provides assured pension benefits to senior citizens.
  • The scheme provides maturity benefit of the return of purchase price.
  • The scheme provides the benefit of premature exit with a return of 98% of the purchase price.
  • The pension payment is done via NEFT or through Aadhaar linked payment system.
  • The scheme provides assured returns of 8% to 8.3% per annum.
  • You may avail the scheme with payment of a large amount which may range from INR 1.5 lakhs to INR 15 lakhs for the sake of monthly pension.

Death Benefit:

In case of death of the policyholder within the tenure of the policy, then the purchase amount will be provided to the nominee named by the policyholder.

Maturity Benefit:

If the policyholder survives the tenure of the policy, then he/she gets a maturity benefit. The policy holder receives the purchase price of the policy, along with the pension instalment.

SEE ALSO: PMVVY: A Pension For Senior Citizens

Eligibility Conditions and Other Restrictions:

The eligibility criteria set by the government which must be fulfilled are:

  • The applicant must be a resident of India.
  • The applicant must be at least 60 years of age.
  • There is no maximum upper age to avail the benefits of the scheme.
  • Any applicant who continues to work post-retirement is not eligible to avail the benefits of the scheme.

Mode of pension payment:

The scheme is designed keeping in mind the needs of the retired person and there are various modes of pension payment which are monthly, quarterly, half-yearly and annual. The pension is sent to the beneficiary via NEFT. The first installment of the pension will be paid after 1 month, 3 months, 6 months or 1 year, depending on the mode chosen by the beneficiary. The pension will be provided based on the date of purchase.

Sample Pension rates per Rs 1000/- Purchase Price:

The sample pension rates for Rs 1000/- purchase price for the available modes of pension payments are as follows:

For every Rs 1,000 invested in this plan,

  • Rs 80 will be paid out in the monthly mode
  • Rs 80.5 will be paid out in the quarterly mode
  • Rs 81.3 will be paid out in the half-yearly mode
  • Rs 83 will be paid out in the yearly mode

The pension installments shall be rounded off to the nearest rupee.

Surrender Value:

Premature exit is allowed by the scheme. Therefore, if the beneficiary exits the scheme during the policy term to meet emergency expenses, then the surrender value payable is about 98% of the policy purchase price.


The loan facility can be availed by the beneficiary, after completion of 3 policy years. The maximum loan that can be given is up to 75% of the purchase price.  The rate of interest imposed on the loan is determined at periodic intervals.

The loan repayment will be done by deducting the interest amount from the pension amount payable under the policy. 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. However, the loan outstanding shall be recovered from the claim proceeds at the time of exit.


The scheme is exempted from Goods and Services Tax (GST). The deposits made under this plan are exempted from income tax under Section 80C of the Income Tax Act, 1961.  However, the interest earned is taxed. The TDS is applicable on the scheme and is deducted on a yearly basis.

SEE ALSO: PMVVY: Pradhan Mantri Vaya Vandana Yojana Pension Scheme

Free Look period:

If the beneficiary is not satisfied with the guidelines of the policy, he/she may return the policy within 15 days (30 days if this policy is purchased online) from the date of receipt of the policy.  The complaint and reason for rejection must be clearly stated. The amount to be refunded within free look period shall be the Purchase Price deposited by the policyholder after deducting the charges for Stamp duty and pension paid (if any).


Suicide: There will be no exclusion on the count of suicide and the purchase price will be refunded in full.

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