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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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.
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
The eligibility criteria set by the government which must be fulfilled are:
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.
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,
The pension installments shall be rounded off to the nearest rupee.
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.
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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