PMVVY was launched by the Government of India in May 2017 and administered exclusively by LIC of India. It was a non-participating, non-linked pension plan — meaning your returns had nothing to do with the stock market. Senior citizens invested a lump sum (the "purchase price") and received a guaranteed pension for 10 years, after which the full purchase price was returned.
The scheme's biggest draw was its guaranteed 7.4–8% returns at a time when bank FD rates were declining. It was extended twice before finally closing for new enrollments on March 31, 2023.
- Pension continues: Your monthly/quarterly/half-yearly/annual pension is unaffected by the scheme's closure
- Loan facility: After completing 3 policy years, you can avail a loan of up to 75% of the purchase price
- Premature surrender: Allowed only in cases of serious illness of self or spouse — 98% of purchase price is refunded (2% deducted as penalty)
- Death benefit: If the policyholder passes away during the term, 100% of purchase price is paid to the nominee
- Maturity benefit: At end of 10 years — final pension instalment + full purchase price returned
- Free look period: 15 days for offline, 30 days for online policy to return if not satisfied (applicable at time of purchase)
Investment in PMVVY is NOT eligible for Section 80C deduction. The pension received is taxable as per your applicable income tax slab. TDS is deducted at source on pension payments. GST does not apply to PMVVY investments. At maturity, the return of purchase price is not separately taxable (it's considered return of principal).