Pradhan Mantri Vaya Vandana Yojana (PMVVY): Scheme Eligibility, Interest Rate, Process to Apply

Manish Kothari
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Manish Kothari

Pradhan Mantri Vaya Vandana Yojana for senior citizens

Pradhan Mantri Vaya Vandana Yojana (PMVVY) launched by the Government of India acts as an insurance policy cum pension scheme for senior citizens. The scheme promises guaranteed pay outs of pension at a certain rate of interest for the tenure. After retirement, there is a possibility of certain kinds of financial or social burden coming along and hence, it is important to financially protect senior citizens from such possibilities and help them in receiving socio-economic safety. The Pradhan Mantri Vaya Vandana Yojana (PMVVY) scheme is provided by the Life Insurance Corporation (LIC) of India. Life Insurance Corporation (LIC) is the only operator for this scheme. No banks or post offices have the privilege to operate this scheme. This scheme has been extended till March 31st, 2023 which is three years more. Earlier this year, this scheme was open till March 31st, 2020. There are certain changes made recently to this scheme.

Eligibility Criteria

There are certain eligibility criteria set for this scheme. The minimum age set for the scheme is 60 years and there is no maximum limit of age for this scheme. 

Interest Rate 

For the year 2020-2021, the scheme provides an assured rate of return of 7.40 % per annum. The rate of interest has seen a dip from 8 percent earlier to 7.4 percent now. Interest rate for the next period will be set from April 1st of next financial year.

Also Read : SBI Bank FD Interest Rates

Features of PM Vaya Vandana Yojana Plan no 842

The scheme has many great features for senior citizens which are mentioned below:

Objective of the scheme

Pradhan Mantri Vaya Vandana Yojana (PMVVY) is specially designed for senior citizens and to facilitate their financial needs and welfare for their lives after retirement.

Policy Tenure

For Pradhan Mantri Vaya Vandana Yojana (PMVVY) scheme, the policy tenure is of 10 years. 


The scheme offers flexibility in providing options to individuals for pay out with plans such as monthly, quarterly, half yearly or yearly according to individual’s financial needs and convenience. The pension payment then is proceeded through options like NEFT or Aadhar Enabled Payment System.

Maturity Benefits

The scheme also offers maturity benefits to clients who have survived the tenure of 10 years. Policyholders after surviving and completing the tenure receive the whole lump sum purchase price of the scheme as well as the last pay out. The benefit is available till the end of the policy.

5. Death Benefits

 scheme offers a death benefit in case of the sudden demise of the policyholder during the policy tenure. In such a case, the nominee is given the entire insured amount as claim.

Free-look Term

The scheme hosts a free of charge tenure after purchase of the scheme within which the policyholder is able to back down if he/she feels uncomfortable with terms and conditions of the policy. The period is 30 days if bought online and 15 days if bought offline. However, it is mandatory to mention the reason for returning the policy in this case.

Loan Facility

The scheme also offers a loan facility and the policyholder can avail loan up to 75% of purchase price against the policy after completion of three years of the policy.

The interest charges of 9.5% p.a. will be applicable on the entire term  of the loans sanctioned till 30 April 2021.

Premature Exit Facility

The scheme offers the facility of premature exit for policyholders if there is a case of requirement of money for treatment of critical or terminal illness. And the surrender value will be 98% of the purchase price of the scheme. 

Tax benefits 

Investments in PM Vaya Vandana Yojana are not eligible for claiming tax deductions under Section 80C of Income Tax Act, 1961. The interest earned or the pension amount is taxable in the hands of investors as per their applicable slab rate. However for providing some relaxations to the senior citizens, this scheme has been exempted from GST(Goods & Services Tax).

Also Read: Tax Saving Investment Options under Section 80C

10. Limits of investment

There is flexibility in choosing the amount of investment or the pension. However, there are certain limits set up for investing in this scheme. The minimum &  maximum limits for different payout options are as follows:

Payout OptionMinimum Investment AmountMaximum Investment Amount
Monthly 1,62,16215,00,000

Also, It is important to note that once the option is selected, it can not be altered.

Limits of Pension 

The limits of the pension amount vary according to the payout frequency opted by the pensioner. The minimum amount of pension payable per month is Rs. 1000, Rs. 3000 for a quarter, Rs. 6,000 for half-yearly or Rs.12,000 for the yearly payout option. 

The maximum amount of pension that can be payable per month is Rs. 9250, Rs. 27,750 for the quarterly option, Rs.55,500 for half-yearly and  Rs. 1,11,000 for the yearly payout option.

The amount of pension payable to the pensioners in any frequency depends upon the amount of lump-sum investment made by them. 

Pradhan Mantri Vaya Vandana Yojana calculation

Payout OptionMinimum Pension AmountMaximum Pension Amount

Also Read: National Pension Scheme

How to Apply for Pradhan Mantri Vaya Vandana Yojana ?

If interested in this scheme, one can apply either online or offline.

Applying offline:

When applying offline, individuals have to go to the nearest LIC branch and decide suitable pension payment. After that, a form is required to be filled up and certain documents are required to be attached along with the form. Documents required are mentioned below:

1. PAN Card

2. Proof of address like Aadhar Card, Passport, etc. 

3. Bank details where pension is required to be credited.

Pradhan Mantri Vaya Vandana Yojana form

Click here to download the offline application form. You can download this form and fill in the required details. Attach the required documents with the form and submit them to your nearest LIC office.

Applying online:

For individuals wanting to apply online, certain steps are required to be taken which are mentioned below:

1.  Go to the official site of LIC India.

2. Under ‘Buy Policy Online’ heading, select the ‘Pradhan Mantri Vaya Vandana Yojana’ option.

3. A tab will open with four options. Choose the button no. 856 for the ‘Click to Buy Online’ option which will open a new page. Select the ‘Click to buy online’ option on the left side corner of the page.

4. For proceeding further, create an access ID and provide the necessary details for generating ID. The 9-digit access ID might be provided via SMS or mail.

5. Submit the access ID and hit the ‘Proceed’ button to proceed with your application.

6. Select preferred pension plan under Pradhan Mantri Vaya Vandana Yojana, fill the application form, upload scanned copies of necessary documents and proceed with payment. 

7. After successfully submitting the application, the policy number along with acknowledgment will be provided.

Pradhan Mantri Vaya Vandana Yojana for senior citizens

FAQs - Pradhan Mantri Vaya Vandana Yojana Scheme

Q. Is there any maximum age limit on this scheme?
A. No, there is no maximum limit on age set for this scheme.

Q. What percentage of purchase price is receivable on premature exit?
98% of purchase price is given in the case of premature exit.

A. Can one apply for the scheme offline in any branch of a bank?
One can apply for schemes offline only in the nearest LIC of India branch.

Q. Is the scheme closed after March 2020?
A. No, the Pradhan Mantri Vaya Vandana Yojana scheme has been extended till 31st March, 2023. 

Q. Is there any medical examination required for the scheme?
A. No, there is no requirement of any sort of medical examination for this scheme.

Q. Can the scheme be purchased online?
A. Yes, the scheme can be purchased or can be applied for through the online process for which one needs to visit the official website of LIC of India. There are certain steps to be followed on the website in order to make the application.

Q. What is the minimum age to be eligible for applying to this scheme?
Minimum age to be eligible to apply to this scheme is 60 years.

Q. Can payment be done on a per month basis?
A. Yes, there are different options for payment like per month, per quarter, per six months and annually.

Q. Is there a premature exit option offered by this scheme?
A. Yes, Premature exit option is offered only if there is a case of requirement of money for treatment of critical illness.

Q. Is there any death benefit offered by this scheme?
A. Yes. In case of sudden demise of the policyholder within the tenure, the purchase price is paid to the nominee.

Q. Is there any maturity benefit offered by this scheme?
A. Yes, there are maturity benefits offered by this scheme if the policyholder survives the tenure of the policy, i.e., 10 years. In such a case, the purchase price along with the latest pension instalment is payable.

Q. Is there any free-look period offered by this scheme?
A. Yes, the free-look period is 15-30 days depending upon how the scheme was purchased. During this period, the policyholder has the option to return the policy, by giving the reason for the return.

Q. Is there any upper limit set for investment in this PMVVY Scheme?
A. Yes, there is an upper limit of Rs. 15 Lakhs for investment in this scheme.

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