Pradhan Mantri Vaya Vandana Yojana (PMVVY) – How to Invest

Pradhan Mantri Vaya Vandana Yojana: PMVVY is a pension scheme announced by Government of India, exclusively for the senior citizens aged 60 years and above which is available from 4th

Raju Choudhary

Pradhan Mantri Vaya Vandana Yojana

Pradhan Mantri Vaya Vandana Yojana: PMVVY is a pension scheme announced by Government of India, exclusively for the senior citizens aged 60 years and above which is available from 4th May 2017 to 31st March 2020.Offline / Online purchase can be through LIC of India.

Pradhan Mantri Vaya Vandana Yojana

The Union Cabinet chaired by Prime Minister Narendra Modi implemented some major changes under Pradhan Mantri Vaya Vandanan Yojana (PMVVY). They are as follows:

  • The investment limit has been increased to 15 lakhs under the Pradhan Mantri Vaya Vandana Yojana (PMVVY). The earlier limit was 7.5 lakhs.
  • The last date to apply for Pradhan Mantri Vaya Vandana Yojana (PMVVY) has been extended to 31st March 2020. It was earlier supposed to end on 4th May 2018
  • The limit on maximum investment has now revised to per senior citizen (and not per family). So now in a family if both husband and wife are senior citizen. Both can invest 15 lakhs each as purchase price (total 30 lakhs) and can enjoy bonus facility

Benefits of PMVVY Yojana:

  • 1) Pension Payment: On survival of the Pensioner during the policy term of 10 years, pension in arrears (at the end of each period as per mode chosen) shall be payable.
  • 2) Death Benefit: On death of the Pensioner during the policy term of 10 years, the Purchase Price shall be refunded to the beneficiary.
  • 3) Maturity Benefit: On survival of the pensioner to the end of the policy term of 10 years, Purchase price along with final pension installment shall be payable.

Eligibility Conditions and Other Restrictions:

a) Minimum Entry Age:60 years (completed)
b) Maximum Entry Age:No limit
c) Policy Term:10 years
d) Minimum Pension:
  • Rs. 1,000 per month
  • Rs. 3,000 per quarter
  • Rs.6, 000 per half-year
  • Rs.12, 000 per year
e) Maximum Pension:
  • Rs. 10,000 per month
  • Rs. 30,000 per quarter
  • Rs. 60,000 per half-year
  • Rs. 1, 20,000 per year`

The maximum pension amount criteria in this plan is for per senior citizen.

Payment of Purchase Price:

The scheme can be purchased by payment of a lump sum Purchase Price. The pensioner has an option to choose either the amount of pension or the Purchase Price. The minimum and maximum Purchase Price under different modes of pension will be as under:

Mode of PensionMinimum Purchase PriceMaximum Purchase Price
YearlyRs. 1,44,578Rs. 14,45,783
Half-yearlyRs. 1,47,601Rs. 14,76,015
QuarterlyRs. 1,49,068Rs. 14,90,683
MonthlyRs. 1,50,000Rs. 15,00,000

The Purchase Price to be charged shall be rounded to nearest rupee.

Mode of pension payment:

The modes of pension payment are monthly, quarterly, half-yearly & yearly. The pension payment shall be through NEFT or Aadhaar Enabled Payment System. The first instalment of pension shall be paid after 1 year, 6 months, 3 months or 1 month from the date of purchase of the same depending on the mode of pension payment i.e. yearly, half-yearly, quarterly or monthly respectively.

Sample Pension rates per Rs.1000 Purchase Price:

The pension rates for Rs.1000 Purchase Price for different modes of pension payments are as below:

  • Yearly: Rs. 83.00 p.a.
  • Half-yearly: Rs. 81.30 p.a.
  • Quarterly: Rs. 80.50 p.a.
  • Monthly: Rs. 80.00 p.a

The pension instalment shall be rounded off to the nearest rupee. These rates are age independent.

Surrender Value:

The scheme allows premature exit during the policy term under exceptional circumstances like the Pensioner requiring money for the treatment of any critical/terminal illness of self or spouse. The Surrender Value payable in such cases shall be 98% of Purchase Price.


Loan facility is available after completion of 3 policy years. The maximum loan that can be granted shall be 75% of the Purchase Price. The rate of interest to be charged for loan amount shall be determined at periodic intervals.

For the loan sanctioned till 30thApril 2018, the applicable interest rate is 10% p.a. payable half-yearly for the entire term of the loan. Loan interest will be recovered from 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.

Free Look period:

If a policyholder is not satisfied with the “Terms and Conditions” of the policy, he/she may return the policy to the Corporation within 15 days (30 days if this policy is purchased online) from the date of receipt of the policy stating the reason of objections. 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


There shall be no exclusion on count of suicide and full Purchase Price shall be payable.



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