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What is Pradhan Mantri Vaya Vandana Yojana (PMVVY) 2022

Pradhan Mantri Vaya Vandana Yojana is a type of pension scheme announced by the Government of India for senior citizens above 60 years.

  • 8,151 Views | Updated on: Feb 07, 2024

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a crucial financial initiative by the Government of India aimed at providing social security and financial stability to senior citizens. Launched in 2017, the scheme has undergone several iterations to address the evolving needs of the elderly population. The latest version, PMVVY 2023, continues to offer a secure investment avenue for senior citizens while adapting to the changing economic landscape.

Key takeaways

  • The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a financial initiative to provide social security and financial stability to senior citizens.
  • Under this scheme, the policyholder will receive an assured return of 8% per annum for the policy duration.
  • In the event of a critical illness affecting the policyholder or their spouse, a premature exit may be considered to meet the high medical expenses.

This scheme aims to offer financial support to senior citizens by providing them with regular pensions when there is a fall in interest rates. The plan was started from 4th May 2017 to 31st March 2020, which is now further extended up to 31st March 2023.

Now that you know what is Pradhan Mantri Vaya Vandana Yojana, let us dig deeper to understand the PMVVY scheme details.

Pradhan Mantri Vaya Vandana Yojana Benefits

Following are the benefits of the Pradhan Mantri Vaya Vandana Yojana that contribute to the well-being of our senior citizens.

  • Under this scheme, the policyholder will receive an assured return of 8% per annum for the policy duration.
  • If the policyholder survives the period, the pension will be paid to them in arrears.
  • If the policyholder dies away during the tenure, the purchase price will be returned to the beneficiary.
  • If the policyholder survives the policy period, the purchase price will be paid back to the policyholder and the final pension installment.
  • After three years of the policy, the policyholder can avail of the benefits of a loan against it. The interest on the loan amount will be recovered from the pension payment that the policyholder makes. If the loan has been sanctioned by 30th April 2018, its interest rate is 10% p.a. and can be paid half-yearly throughout the policy term. PMVVY loan facility is one of the reasons behind the massive popularity of the scheme.
  • If the policyholder is unsatisfied with the policy terms, they can surrender the policy within 15 days. However, if the procedure is bought online, the free-look period is 30 days.

Eligibility Criteria for PMVVY

Before applying for the PMVVY scheme, you need to check the following eligibility criteria:

  • The individual must be 60 years old or above.
  • There is no maximum limit for entry.
  • The tenure of the PMVVY scheme is ten years.
  • The minimum pension that can be paid monthly, quarterly, half-yearly, and yearly are ₹1,000, ₹3,000, ₹6,000, and ₹2,000, respectively, and the maximum limit can range from ₹10000, ₹30000,₹60000, and ₹1,20,000 respectively.
  • While deciding the pension ceiling, the entire family is considered.

Documents Required for the PMVVY

Here are the necessary documents one must submit before enrolling on Pradhan Mantri Vaya Vandana Yojana:

  • Aadhaar Card
  • Proof of Age
  • Proof of Residence
  • Passport-size photos of the applicant
  • Relevant Document/Declaration to show the retired status of the applicant

Taxes on the Pradhan Mantri Vaya Vandana Yojana scheme

In the event of the imposition of Statutory Taxes by the Indian Government or any other constitutional tax authority in India, policyholders will adhere to the relevant tax laws and applicable tax rates. However, for the computation of benefits payable under the PMVVY scheme, the taxed amount will not be considered.

Premature exit from the Pradhan Mantri Vaya Vandana Yojana scheme

While PMVVY is intended as a long-term investment, certain conditions may arise that necessitate a premature exit. Policyholders can consider opting out of the scheme under the following circumstances:

Critical Illness

In the event of a critical illness affecting the policyholder or their spouse, a premature exit may be considered to meet the high medical expenses.

Death of Policyholder or Spouse

The demise of the policyholder or their spouse can lead to a premature exit from the scheme, and the accumulated corpus is typically paid to the nominee or legal heirs.

Financial Hardship

Unforeseen financial difficulties may prompt individuals to exit the scheme early to access the accumulated funds.

Implications of Premature Exit

While the PMVVY scheme allows for premature exits under specific conditions, policyholders need to be aware of the potential implications:

Reduction in Payouts

Exiting the scheme prematurely may result in a reduced payout compared to the original maturity value. This is because the interest rate applied to calculate the surrender value may be lower than the guaranteed rate promised under the scheme.

Loss of Guaranteed Income

PMVVY offers a fixed interest rate for the entire policy term, providing a stable income source for retirees. Premature exit may result in the loss of this guaranteed income for the remaining policy term.

Impact on Financial Planning

Exiting the PMVVY scheme prematurely can have a significant impact on the overall financial planning of retirees. It is crucial for individuals to carefully assess their financial situation and explore alternative solutions before making a decision.

Examples of Pension Rates under the PMVVY scheme

Consider a senior citizen, Mr Sharma, aged 65, who invests ₹10 lakh in the scheme. The chosen payout frequency determines the pension rates and is subject to change based on prevailing market conditions.

Example 1: Monthly Payout

Mr. Sharma invests ₹10 lakh in the PMVVY scheme.

The applicable pension rate for a monthly payout is, for instance, 7.4% per annum.

Monthly Pension = Purchase Price * Pension Rate / 12

Monthly Pension = ₹10,00,000 * 7.4% / 12 = ₹6,167

Therefore, Mr Sharma will receive a monthly pension of ₹6,167 in this scenario.

Example 2: Annual Payout

Let us consider the same investment amount of ₹10 lakh.

The pension rate for an annual payout might be 7.6% per annum.

Annual Pension = Purchase Price * Pension Rate

Annual Pension = ₹10,00,000 * 7.6% = ₹76,000

In this case, Mr Sharma would receive an annual pension of ₹76,000.

How to Apply to PMVVY?

One can apply for Pradhan Mantri Vaya Vandana Yojana online and offline. To apply for this scheme, you need to follow the below-mentioned steps:

Offline Process

  • Take the application forms from any of the LIC branches
  • You must then fill the form with the relevant details
  • Next, you will have to attach all the essential self-attested documents
  • After following all these steps, one must submit the form by attaching all the documents at any LIC branch

Online Process

  • Visit the official LIC website
  • Click on “Products”
  • Search for “Pension Plans”
  • Fill out the application form that is available under “Buy Policies.”Submit the form and self-attested document soft copies for further process

Pension Payment Modes

Under the Pradhan Mantri Vaya Vandana Yojana, the pension can be made monthly, quarterly, half-yearly or annually according to the policyholder’s preference. The payment for the retirement can be made via Aadhaar Enabled Payment System or National Electronics Fund Transfer (NEFT).

Maximum Investment in PMVVY

Under the PMVVY scheme, the policyholder can invest in an amount of up to ₹1.5 lakhs. This limit applies to the primary investor. To avail the return of ₹1,000 per month from the scheme, you must have a minimum investment of ₹1.5 lakhs.


PMVVY is a risk-free investment option for senior citizens above the age of 60 years. The pension from this scheme is a regular source of income to support the financial needs of retired individuals. However, one must have sufficient liquid funds to invest in this scheme.



What is the procedure to apply for the scheme?

The application process for PMVVY involves the following steps:

  • Visit the official website of the Life Insurance Corporation of India (LIC) or approach a nearby LIC branch.
  • Obtain the PMVVY application form and fill it with accurate details.
  • Attach the necessary documents as mentioned in the form.
  • Submit the completed application form along with the documents to the LIC branch.
  • Pay the premium amount through the specified mode (cheque, demand draft, etc.).
  • The policy document will be issued once the application is processed and approved.


What are the various modes by which I can invest in the scheme?

The Pradhan Mantri Vaya Vandana Yojana can typically be invested in through the following modes:

Offline Mode: Visit the nearest LIC branch, fill out the application form, and submit the required documents along with the premium amount through cheque or demand draft.

Online Mode: Some insurance companies may provide online application facilities through their official websites. In such cases, you can fill out the form online, upload the necessary documents, and make the premium payment electronically.

Pension Payment Modes: The Pradhan Mantri Vaya Vandana Yojana allows policyholders to receive their pension on a monthly, quarterly, half-yearly, or annual basis, depending on their personal choice.


Are there any tax benefits associated with PMVVY 2023?

Yes, PMVVY 2023 offers tax benefits. The pension income is taxable as per the income tax slab of the policyholder. However, the premium paid for the policy is eligible for a deduction under Section 80C of the Income Tax Act, subject to the overall limit prescribed. Policyholders are advised to consult with a tax advisor for personalized guidance on tax implications.


How Often Are Health Insurance Premiums Due?

The scheme has a policy term of 10 years. During this period, policyholders receive regular pension payments. The policyholder can choose the frequency of the pension payments, which can be monthly, quarterly, half-yearly, or yearly.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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