Here's how to buy 8% Pension scheme Pradhan Mantri Vaya Vandana Yojana; Benefits, Loan eligibility, Purchase price and everything you want to know

The government of India has announced Pradhan Mantri Vaya Vandana Yojana for citizen age 60 years and above that fetches 8% interest rate. LIC of India has been given the sole privilege to operate this scheme. The Pradhan Mantri Vaya Vandana Yojana has been launched on 4th May 2017.The scheme shall be available for one year from date of launch.

PMVVY is a pension scheme launched by the government solely for senior citizens—aged 60 years or more. But, there is no maximum age for entry.

The minimum purchase price for collecting pensions each month is Rs 1.5 lakh, where a senior citizen will get a pension of Rs1,000 per month. 

The maximum purchase price for monthly pension is Rs 7.5 lakh, which will retrieve Rs 5,000 per month.

Benefits : 

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 was chosen) shall be payable.

Death Benefit:

On the death of the Pensioner during the policy term of 10 years, the Purchase Price shall be refunded to the beneficiary.

Maturity Benefit:

On survival of the pensioner to the end of the policy term of 10 years, Purchase price along with final pension instalment shall be payable.

Eligibility Conditions and Other Restrictions: 

Minimum Entry Age: 60 years (completed)

Maximum Entry Age: No limit

Policy Term: 10 years

Minimum Pension: 

Rs. 1,000/- per month

Rs. 3,000/- per quarter

Rs.6,000/- per half-year

Rs.12,000/- per year

Maximum Pension: 

Rs. 5,000/- per month

Rs. 15,000/- per quarter

Rs. 30,000/- per half-year

Rs. 60,000/- per year

A ceiling of maximum pension is for a family as a whole i.e. total amount of pension under all the policies allowed to a family under this plan shall not exceed the maximum pension limit. The family for this purpose will comprise of a pensioner, his/her spouse and dependents.

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 Pension	Minimum Purchase Price	Maximum Purchase Price
Yearly	Rs. 1,44,578/-	Rs. 7,22,892/-
Half-yearly	Rs. 1,47,601/-	Rs. 7,38,007/-
Quarterly	Rs. 1,49,068/-	Rs. 7,45,342/-
Monthly	Rs. 1,50,000/-	Rs. 7,50,000/-

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.

Loan:

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 in Financial Year 2016-17, 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.