PMVVY ( 2020-202- Features and Benefits 2020-2023

 

PMVVY full form is Pradhan Mantri Vaya Vandana Yojana. Now, this scheme has come up with new features and benefits for 2020-2023.

In addition, it has 5 changes when compared earlier PMVVY.

Pradhan Mantri Vaya Vandana Yojana Features and Benefits are…

• You should have a minimum of 60 years’ age to buy this scheme.
• But there no upper age limit is set in this scheme. So, anyone who is more than 60 years of age can buy this scheme.
• In addition, the monthly pension is 7.4% for Financial Year 2020-2021.
• The policy term or the pension period is 10 years.
• In addition, the minimum monthly pension is Rs.1,000, per quarter is Rs.3,000, quarterly is Rs.6,000. and for yearly minimum pension is Rs.12,000.
• Moreover, the maximum pension per month is Rs.5,000, quarterly Rs.15,000, half-yearly is Rs.30,000, and yearly is Rs.60,000.
• Only the Lic of India is eligible to sell this product. No other Life Insurance company is allowed to sell this product.
• In addition, You can buy this product both online and offline from the Lic of India.
• You can buy this product from 1st April 2020 to 31st March 2023.
• In addition, You can get 75% of the purchase price as a loan after 3 years, the loan amount will be recovered from the interest payment.
• You can surrender this policy before maturity in some exceptional cases like critical illness to self/spouse.
• In addition, this surrender value will be 98% of the purchase price.
• The pension will be directly credited into the bank account via NEFT or aadhar enabled payment system.
• You can choose one term to get a pension-like monthly/quarterly/half-yearly/yearly at the time purchasing this product.
• This scheme is exempted from Service Tax and Gst.
• In addition, this pension amount will not fall under section 80 C and it will b taxed as per your income tax slab.
• Moreover, there is TDS on the pension amount.

How to this PMVVY scheme?…

You can buy this scheme both offline and online from Lic Of India.

There will be a free look period of 15 days ( i,e you can cancel this policy) if bought offline.

In addition, If you bought this policy online, then this free look period is for 30 days.

What are the benefits of the PMVVY Scheme ?…

• After 10 years, the policyholder will receive the purchase price along with the financial interest payment.
• If the policyholder dies before maturity, then the nominee or legal heir will receive the purchase price of the policy.
• In case the policy policyholder survives all these 10 years, then he will receive the pension as per the mode that has opted for.
• The interest rate is 7.4%.
• However, this interest rate will be changed every year. ( i.e If you are buying in the 2nd year).
• The minimum amount needed to invest is Rs.1,56,658 to get a yearly interest payment of Rs.12,000.
• If you are opting for Rs.1,000 monthly pension, then you need to invest Rs.1,62,162.
• The interest rate is linked to the Senior Citizen Saving Scheme.
• In addition, the finance minister will approve the interest rate at the beginning of every financial year.

What are the disadvantages of this policy?…

• The maximum amount allowed in this scheme is 7.5 lakh only, so you can not completely depend on this scheme completely, and you have to look for some investments also.
• There are no tax benefits for this scheme. So it is less attractive in my view.
• One more important issue is liquidity, you can not withdraw money until the term is completed or in case critical illness.

Conclusion about PMVVY…

If you are bothered about taxation and liquidity, you can buy this product. But its features and benefits are fine apart from tax and liquidity.

As it is backed by the Government of India and Lic of India, and also it is providing a higher interest rate when compared to a Bank Fd.

Are you looking for a real estate investment? then read this article.

The source of this article is Financial Express.