The country's largest life insurance company, Life Insurance Corporation of India (LIC) provides pension plans for the senior citizens, besides offering various insurance products. And Pradhan Mantri Vaya Vandana Yojana is one such product offered by LIC. According to the LIC website, this scheme can be obtained for a minimum lump sum payment of Rs. 1, 44,578 & a maximum lump sum payment of Rs. 15 lakh for a policy period of 10 years.
Benefits of Pradhan Mantri Vaya Vandana Yojana
The scheme offers an assured return of 8 % per annum during the term of the policy, which is 10 years.
The pension term can be - monthly, quarterly, half-yearly or annually as per the convenience or preference of the pensioner. The pension amount will be paid at the end of every period. The person who retires can get Rs.1000 to Rs.10, 000 / month depending on the sum invested in the policy. A pension amount of Rs.3000 to Rs.30, 000 can be received on quarterly mode and Rs.6, 000 to 60,000 on a half-yearly basis. In general, the retiree can earn income of Rs.12, 000 - Rs.1, 20,000 / year.
Under this policy, the maximum pension limit applies for the total sum allowable to the entire family.
The pension scheme allows the pensioner to apply for a loan amount of 75 percent of purchase cost after 3 years of the pension period to meet urgent requirements. The interest depends on the purchase value.
This pension plan lets pre-mature exit.
The scheme is exempted from GST or Service tax. The interest received is taxable.
Opening a Pension Account
A person who is 60 years old and has retired can open his or her account within 1 month of the retirement. The only thing to keep in mind is the purchase amount must not exceed the retirement benefit.
Eligibility Criteria for Pradhan Mantri Vaya Vandana Yojana
Senior citizens who are planning to avail this scheme for a safe retirement must fulfill the following conditions:
They ought to be an Indian by citizenship
The applicant must be a senior citizen (60 years and above)
There is no maximum age limit to benefit from this scheme
The person who continues to work after retirement is not eligible.
The applicant needs to provide the necessary documents:
Passport size photo
Relevant documents proving that the person has retired
The senior citizen can apply either online or offline for Pradhan Mantri Vaya Vandana Yojana.
1. Offline Process
The Government has executed this scheme through LIC hence the application form must be filled and submitted to any of the LIC branches. The application form can be obtained by visiting the LIC office.
2. Online Process
Here you need to first visit the official website and click on Pradhan Mantri Vaya Vandana Yojana under ‘Buy Policies’ title. Fill the form properly and submit it.
In case the pensioner or the other half is affected by any fatal illness during the pension period then the investor can withdraw. In this type of exit, 98 % of the purchase price will be paid back. In case of pensioner’s death in the 10 years, the purchase cost would be refunded fully to the nominee.
Closing of Account
The account concludes in 10 years from entering into the scheme. Purchase cost along with final pension instalment is given to the pensioner on continued existence till the end of the policy period of 10 years.