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Pradhan Mantri Pension Yojna (Pradhan Mantri Vaya Vandana Yojana)

Pradhan Mantri Vaya Vandana Yojana or popularly known as Pradhan Mantri Pension Yojana or  Prime Minister Pension Scheme  is a government-subsidised pension scheme for senior citizens.. It addresses  the long-standing concerns of senior citizens (varisht nagarik) who want a pension plan where their savings are protected and maximum returns guaranteed. If you are a senior citizen worried about market forces eating into your savings, then you may rest easy with this scheme. .

Features of Pradhan Mantri Pension Yojna or Pradhan Mantri Pension Yojna:
  • It is available for one year, from 4 May 2017 to 3 May 2018.
  • It is eligible for Indian citizens who are 60 years or more of age.
  • Sale  is through  Life Insurance  Corporation of India offices/branches.
  • There is no maximum age limit for entry.
  • The pension period or policy term is 10 years.
  • The  pension  will be payable  to the pensioner surviving during the policy term of 10 years.
  • The plan provides for assured pension returns of 8 per cent per annum (8.30 per cent annualised).
  • The minimum purchase price for entering this plan is Rs 144,578 (one time) for receiving pension on a regular basis. The maximum purchase price is Rs 722,892 (one time).
  •   The minimum  pension amount  payable will be Rs  12,000 (Rs 11,999.97  to be exact) annually. The  maximum amount will be Rs 60,000  (Rs 57,831.36 to be exact) annually.
  • No income  tax benefit  is offered for this plan.
  • Surrender  value benefit  is available. You  can surrender this policy  during the policy period under   certain exceptional circumstances   (for example, if you require money for  treatment of a critical/terminal illness of  self or spouse). Surrender value payable will  be 98 per cent of purchase price.
  • Assignment facility is available only against LIC  for obtaining a loan.
  • Loan   facility   is available   on this plan  after completion of three years and the same will be restricted to 75 per cent of the purchase price. Loan  interest will be recovered from pension amount payable under the policy.
  • A 'free look' period of 15 days is available from the date of receipt of policy bond, if policyholder is  not satisfied with the terms and conditions' of the policy. For online purchase, the free-look period is 30 days.


Prime Minister Pension Scheme Benefits

On  survival  of the pensioner  during the policy term, pension in arrears shall be payable to him/her depending on the chosen mode of pension payment. The  pensioner has the option to choose either the amount of pension or the purchase price.

Mode of Pension


Purchase Price



Maximum Purchase


Pension amount





















Courtesy LIC CO Circular No.CO/PD/91, dated 02.05.2017

Death Benefit

On death of pensioner during the policy term, the purchase price shall be refunded to the nominee/legal heir.

Maturity Benefit

On survival of pensioner till the end of the policy term, purchase price and the final pension instalment shall be payable.

Disadvantages of Pradhan Mantri Pension Yojna or Pradhan Mantri Vaya Vandana Yojana
  •   The amount is locked in for 10 years; so it may not be available if required urgently (except in illness).
  •   The pension  is not adjusted  to inflation. The purchasing power of, say, Rs 6,000 may reduce to half in 10 years.
  •   There  are no  tax benefits  on the pension  you receive.

The Prime Minister’s Pension Scheme is a simple and safe product offering   assured returns and is backed by the government. But you may want to look at other investments that offer higher returns, too.

Other Pension Schemes:


Divya Patwal



  1. Monoranjan Ghose
    July 21, 2018

    In the Table you have shown Purchase price of Rs. 750000/- with a monthly pension of Rs. 12000/- under Pradhan Mantri Pension Yojna. Is it correct? Please clarify.
    M. Ghose

    • Divya Patwal
      August 14, 2018

      Hi Monoranjan, Please contact to your nearest bank for the same.

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