Deferred Annuity: Meaning, Benefits, Types & How It Works

Financial planning is important in all phases of life. But planning for retirement is vital to secure social status and financial stability in your old age. A deferred annuity is one such retirement plan to secure your funds for the future. It is a retirement plan that provides your financial independence after a certain age. 

Receiving funds regularly or as lump sum post-retirement helps you cover your expenses and provide a regular source of income. Let’s discuss the deferred annuity plans and other significant details regarding the same. 

What is deferred annuity?

In simple words, it is a type of retirement plan. In this scheme, the insured individual makes a contract with the insurance company by which they will pay a series of lump-sum funds to the insurance company to build a retirement corpus. On vesting, this corpus would be utilised to pay a monthly or an annual pension to the annuitant.

How does deferred annuity work?

The deferred annuity works on a tax-deferred basis. The funds invested in the annuity plan can be withdrawn by the insured individual at any time during the tenure. 

  1. The amount accumulated is deferred of tax until they are withdrawn. The premium paid to build up the deferred annuity corpus is tax-free under section 80CCC upto INR 1.5 lakhs every year.
  2. Individuals only have to pay tax when they withdraw funds or when they start receiving income.
  3. The accumulation phase is the phase where the investor pays funds on the annuity.
  4. Annuity begins from the vesting date.
  5. At the time of vesting, the annuitant has an option to withdraw 1/3rd of the entire corpus as a tax-free amount under section 10(10A). The remaining amount must be utilised to purchase an annuity per the available options.
  6. The payout phase is when the funds are exchanged back to the investor as a pension. This is taxable in the hands of the annuitant.
  7. The income is usually planned to allow the investor and their spouse to receive income per the annuity chosen option.

Benefits associated with a deferred annuity

The flexibility of the deferred annuity allows the investor to withdraw funds anytime they want or even transfer funds to meet their needs. There is no compulsion to convert the funds into a series of income as you can withdraw it as a lump sum anytime you want.

Some of the benefits of a deferred annuity are discussed below,

  1. Multiple payout options:

    The funds accumulated can be paid out per the schemes you finalise with the insurer. You can receive payouts for your lifetime or for your spouse or opt for other annuity options as well.

  2. Delay your payments:

    The funds don’t have to be paid out immediately. In a deferred annuity, you must wait until the deferred phase is complete. After this period, you can either opt for payouts or annuitize them even longer.

  3. Easy investments

    You can add funds as lump sums or series during the accumulation phase. You can opt for the best investment schemes depending on the company’s policies.

  4. Easy withdrawals

    The funds can be withdrawn as a lump sum or as a series. The withdrawn funds will be taxable, be it a lump sum or periodic. However, their will interest earned is included in these funds.

  5. Tax exemption on the premium payment

    As mentioned earlier, the premium paid to build the corpus is tax-free under section 80CCC upto INR 1.5 lakhs per annum.

Limitations of a deferred annuity

As much as the deferred annuity is a safe, regular income option for retirement, it also has limitations of its own.

  • No tax benefits

    The income received from these annuity plans is taxable. Even though the taxes are deferred when they are accumulated, the investors must pay the taxes once they begin to receive the income or withdraw the lump sums.

  • Does not allow premature surrender

    The funds are not accessible and are accumulated until they attend maturity.

  • Expensive

    The investors pay higher fees and expenses for deferred annuity compared to other insurance schemes. 

Deferred annuity payouts

In annuities, the payouts are made as a series of income for the investor for their lifetime. The payout value is decided by the individuals while they enter into the scheme. The scheme’s main aim is to provide a regular source of income for them and their spouse for their lifetime.

In a deferred annuity, the payouts are paid after the deferment period. During this phase, the funds are accumulated, and the interest is earned over them. The funds accumulated are tax-deferred. However, the individuals are expected to pay the taxes for the income they receive as per their tax allotments.

Should you invest in a deferred annuity?

Financial planning is an essential safety protocol. However, choosing the right one is even more important. Understanding your financial needs and requirements, you can opt for an ideal investment. 

A deferred annuity can be a great choice if you don’t have any urgent funds or debts. As in a deferred annuity, you only receive funds after the deferment phase, it’s important to understand your financial needs until the payouts are available. A deferred annuity is also a great option if you and your spouse aim for regular income for life. 

Difference between a deferred annuity and tax deferral

People often confuse deferred annuity and tax deferral. Both are different. Tax deferral is a feature that comes under annuities.

In general, no taxes are paid on the income received from the funds. The amount stays tax-deferred until its withdrawn. Taxes are paid when they are released from the tax-deferred account. Letting the funds stay in the account, allowing reinvesting and gaining more benefits from the funds.

Difference between a deferred annuity and an immediate annuity

Even though both deferred annuity and immediate annuity are retirement plans, they both vary by payout timing. Both the funds allocate different payout receiving timing.

  • In an immediate annuity, the investor can receive income immediately after investing.
  • In a deferred annuity, the investor needs to wait to receive income. The funds undergo a deferment phase before the payout begins. 


Being financially independent after retirement is the ultimate financial goal. An annuity plan allows individuals to source a regular income Post-retirement. This ensures financial stability and maintains the social status of the individual.

A deferred annuity can be a great option as it offers tax deferment until the funds are withdrawn. If you aren’t in any debt or emergency, then opting for deferred annuity allows you to save better funds for yourself and your spouse, whoever lives longer.


  1. Can I withdraw my funds earlier?

    Early withdrawal or withdrawing of the funds before the individual reaches 59.5 years can lead to a penalty. The investors have to pay a 10% penalty tax over the withdrawn funds along with the tax they were supposed to pay for the withdrawn funds. 

  2. What are the disadvantages of buying a deferred annuity plan?

    The main disadvantage while choosing a deferred annuity is doesn’t allow immediate withdrawal. Even no tax benefits are provided on the funds when they are withdrawn. On top of the taxes, most companies also fix high fees to maintain these accounts.

  3. Are pension and deferred annuities the same?

    No, even though both are retirement saving plans, they are different. In pension, the individual saves funds from their income and receives them after retirement. In deferred annuities, the incomes are received from the funds invested by the investor. However, the investors need not wait until retirement to gain the benefits. 

  4. Are there any death benefits in a deferred annuity?

    Yes, the deferred annuity provides death benefits. The funds accumulated are passed over to the beneficiary of the investor, as mentioned in their insurance contract. The funds are either paid out as lump sums or on periodic bases.


This article is issued in the general public interest and is for educational purposes only. The blogs should not be used as a substitute for competent expert advice from a licensed professional to best suit your needs. Insurance is a subject matter of solicitation. For more details on policy terms, conditions, exclusions, limitations, please refer/read policy brochure before concluding sale.

YSR Pension Kanuka: YSR Pension Eligibility Criteria, Benefits & Types

Introduction to YSR Pension Kanuka

Y.S.Jagan Mohan Reddy, the Chief Minister of Andhra Pradesh announced YSR Kanuka Pension Scheme in June 2019. YSR Pension Scheme has been launched by the state government of Andhra Pradesh for providing financial help to vulnerable sections of society. The vulnerable sections of the society include old age people, disabled persons, transgenders, cobblers, fishermen, weavers, widows, Dapu artists, patients suffering from chronic diseases, etc. The YSR Kanuka Pension Scheme beneficiaries began receiving the scheme’s benefits on 1 July 2019. 

Despite being a Sunday, the state government disbursed the second instalment of the funds to the vulnerable sections on March 1, 2020. Around 87.5% of beneficiaries got the benefit from the YSR pension on the same day. Thereafter, when the Covid 19 hit the world, the factories and shops were shut down for an uncertain time. At that time, this scheme emerged as a great help for pensioners. 

YSR Pension Kanuka eligibility criteria 

To be eligible for the YSR Pension Kanuka, the applicant must fulfil the given YSR pension eligibility. The applicant:

  • Must be from a Below Poverty Line family, with a White ration card
  • Should not be enrolled with any other Government pension scheme.
  • Should be the inhabitant of Andhra Pradesh
  • The required age criteria are explained below


Age limit

Old age pension

60 years or above 

Anti Retroviral pension

No age limit but the applicant should have the medical proof of 6 months of treatment

Transgenders pension

18 years or above

Toddy Tappers pension 

50 years or above

Fishermen pension

50 years or above 

Disabled pension 

No age limit

Widow pension

18 years or above 

Single women pension 

Divorced/ separated women: 35 years or above

Unmarried women (rural areas): 30 years or above

Unmarried women (urban areas): 35 years or above

Traditional cobblers pension 

40 years or above

Dappu artists pension

50 years or above 

Weaver’s pension 

50 years or above

Features of YSR Pension Kanuka

The features of the Andhra Pradesh government’s YSR Pension Scheme are given below:

  • YSR Pension Kanuka scheme is a great step that has been taken by the State Government of Andhra Pradesh to help the financially backward section of society.
  • During Covid 19 pandemic, the YSR Pension scheme helped the vulnerable people a lot by providing them with financial relief when they had no source to earn a livelihood.
  • The beneficiaries should be below the poverty line. In this way, this scheme helps poor people live a better life than before.
  • Those women who are widowed/separated are able to get the benefit from the YSR Pension Scheme to start their life once again 
  • YSR Pension Scheme is easily available to the beneficiaries whenever the state government allocates the amount to them.

Benefits of YSR Pension Kanuka

There are many benefits that the beneficiaries are getting from the YSR Pension Scheme. Some key benefits are given below:

  • The beneficiaries get the amount of INR 2250 from the social security pension scheme i.e. YSR Pension Kanuka scheme.
  • The government has reduced the age limit from 65 years to 60 years. Now, people who are 60 years old are eligible to get the pension as per the YSR Pension Kanuka eligibility criteria.
  • The patients who are suffering from chronic kidney diseases get the amount of INR 10000 with the help of the YSR Pension Scheme. In this way, they get significant financial help for getting the right treatment in government/private hospitals.
  • Transgenders, disabled people (at least 40%), and dappu artists get INR 3,000 as pension under this scheme.

Types of pensions under the YSR Pension Kanuka Scheme

YSR Pension Scheme provides the following types of pensions:

  • Old age Pension
  • Anti-Retroviral Therapy Pension (ART Pension): 
  • Transgenders Pension
  • Toddy tappers’ Pension
  • Fisherman Pension 
  • Disabled Pension
  • Widow Pension 
  • Single Women Pension
  • Traditional Cobblers pension
  • Dappu Artists Pension: 
  • Weavers Pension.
  • Chronic Kidney Disease of Unknown Etiology (CKDEU) Pension.

Steps to apply for YSR Pension Kanuka:

Follow the following steps to apply for the YSR Kanuka Pension scheme:

  • Step 2
    Then, click on the homepage to download the YSR Pension Kanuka Scheme application form.
  • Step 3
    After downloading the application form from the official website, take a printout to fill it out.
  • Step 4
    Confirm that you are eligible to apply for the pension scheme and have all the necessary documents to attach with the application form.
  • Step 5
    Fill out the form carefully and attach all the required documents i.e. Aadhar card, bank passbook, ID proof, BPL card, etc.
  • Step 6
    Submit the application form to the Gram Panchayat Office for verification.

Eligible applicants for the YSR pension scheme 

  • The old age people, transgender, toddy tappers, weavers, traditional cobblers, widows, single women, fishermen, and dappu artists are eligible to apply as per the YSR Pension Kanuka eligibility criterion.
  • Those who are 40% disabled physically or mentally can also apply for the YRS Pension Scheme. 
  • Furthermore, those who have taken antI-retroviral therapy for a continuous period of 6 months are also considered eligible to apply for this pension scheme. 
  • Special provision is for those patients who are suffering from chronic kidney disease of unknown etiology (CKDE) in this scheme.

How to check the beneficiary list for the YSR pension scheme?

The state government of Andhra Pradesh decided to provide monetary help to the socially backward people as well as the financially backward people so that they will be able to have a certain source of income to live a good life. Thousands of beneficiaries have got financial aid from the YSR Kanuka Pension Scheme. 

For checking the beneficiary list of the YSR Pension Scheme, follow the following steps:

  • Visit the official website of the YSR Pension Scheme i.e.
  • Enter the asked information on the webpage: name of district/ panchayat/ mandal.
  • Then, click on the link GO to submit the information.
  • Then, you will be able to get the list of beneficiaries on your computer screen.

Documents required for the YSR Kanuka Scheme

Those who want to get the benefits of the YSR Pension Kanuka should have the following documents:

  • They should have the BPL ration card to prove that they belong to the below poverty line
  • Aadhar card, residential proof, birth certificate/ identity proof, and bank certificate are mandatory for applying for the YSR Pension Scheme
  • Those who are transgenders should have a medical certificate.
  • A widowed woman should have the death certificate of her husband.

YSR Kanuka Pension selection procedure 

The selection procedure of the applicants for the YSR Kanuka Pension Scheme is given below: 

  • When the applicant submits the application to the Gram Panchayat, then the application is sent to the Gram Sabha for the verification process.
  • Gram Sabha approves the application and forwards the application to the municipal office for validating the filled information and documents.
  • Finally, MPDO (Municipal Planning and Development Office) disburses the pension to the eligible beneficiaries in the rural areas. The municipal office disburses the pension in the urban areas. 

Pension amount under YSR Pension Kanuka 

The state government of Andhra Pradesh has decided on the following amount to disburse to the beneficiaries under the YSR Kanuka Pension Scheme:

  • Old people, anti-retroviral, toddy tappers, traditional cobblers, single women, widowed women, and fishermen receive a monthly pension of INR 2250.
  • Transgender, disabled persons. dappu artists receive a monthly pension of INR 3000. 
  • The patients who are suffering from chronic kidney disease and are undergoing dialysis receive the amount of INR 10,000 every month for their better treatment in private/ government hospitals. 

How to search for a pension ID for YSR Pension Kanuka?

The process for searching for the pension ID for YSR Pension Kanuka Scheme is given below:

  • Firstly, go to the official website of the YSR Kanuka Pension Scheme i.e.
  • Then, you should click on the search option on the homepage.
  • You will get two options: Pension ID and Grievance ID.
  • You have to enter your pension ID/ration card number/ saderam ID
  • Then, you are asked to select your district/ mandal/ panchayat.
  • After submitting these details, you will be able to access the required information.

Track status for YSR Pension Kanuka:

The process of tracking the YSR Pension Kanuka status is given below:

  • You should visit the official website of the YSR Pension Kanuka Scheme to track the status of your application. The link to that official website is
  • On the homepage, you will get two options: Pension ID and Grievance ID.
  • Click on the desired option.
  • Then enter the required information.
  • Submit it.
  • Now, you will able to view the YSR Pension Kanuka status. 

YSR Pension Kanuka Customer Support:

In case of any discrepancy regarding the implementation of the YSR Kanuka Pension Scheme, you are able to contact the department of the rural department that comes under the government of Andhra Pradesh. The state government is always ready to work towards the welfare of the financially backward people. Hence, they can contact the society for eliminating rural poverty. The address of the society is 

Society for Elimination of Poverty,

2nd Floor, Dr N T.R. Administrative Block, Pandit Nehru RTC Bus Complex, 

Vijayawada, Andhra Pradesh-520001.

If you want you can call on 0866-2410017.


YSR Pension Scheme has been implemented by the state government of Andhra Pradesh to uplift the living standards of those vulnerable people who are dragging their lives. The process to fill out the application form and then its submission in the Gram Panchayat for the next procedures of approval is easy to understand for the common citizens. Many people have benefited as this scheme is divided into the 12 categories and the pension amount that has been decided to disburse is as per their needs.


  1. Who can come in the category of Toddy Tapper’s pension?

    You should be a member of the Toddy Co-operative Society (TCS). You can also be registered with the Tree for Taper’s scheme. These are the essential requirements that you should have for getting a pension of INR 2250 under this scheme. Furthermore, your age should be 50 years or above.

  2. What provisions are provided to single women under the YSR Pension Kanuka?

    If you are divorced/separated, then you will be able to apply for the monthly single women pension scheme. The age eligibility is 35 years old, but if you are unmarried and living in a rural area, you should be at least 30 years old for getting the advantage of the YSR Pension Scheme of Andhra Pradesh. Unmarried girls who are living in the urban areas should of at least 35 years old to be the beneficiary.

  3. What monthly amount is given to those who fall in the category of the chronic disease of unknown etiology (CKDEU)?

    Those who fall in the category of chronic disease of unknown etiology get the monthly pension amount of INR 10,000 for their dialysis treatment in government/ private hospitals.

  4. What documents are required with the YSR Pension Scheme application form?

    The following documents should be attached by the applicant with the YSR Pension Scheme application form:

    • Bank Passbook
    • Ration Card
    • BPL Card
    • ID Proof
    • Address Proof
    • Aadhar Card.


This article is issued in the general public interest and is for educational purposes only. The blogs should not be used as a substitute for competent expert advice from a licensed professional to best suit your needs. Insurance is a subject matter of solicitation. For more details on policy terms, conditions, exclusions, limitations, please refer/read policy brochure before concluding sale.

Information Page On Difference Between Assignment Vs Nomination In Life Insurance

Difference between nomination and assignment 

In life insurance products, two terms assignment and nomination are frequently used. While not many may understand them, it is imperative to know the meaning and the difference between assignment and nomination before purchasing any insurance plan. 

The primary difference is about policy ownership. While in nomination, the policy owner remains unchanged. However, in an assignment, the policy ownership is transferred from one person to another. The nominee (as in nomination) gets the benefit after the death of the life assured but the assignee (as in assignment) gets the benefits when the life assured transfers the rights and ownership of his/her policy to the assignee. These are some of the basic and common differences between nomination and assignment. 

Let us learn some more about assignment and nomination, and what role they play in insurance. 

What is nomination in life insurance? 

Nomination is one of the most essential processes of the life insurance policy. The policyholder has to make any one family member his/her nominee. The nominee is considered eligible to claim the benefits of the life insurance policy if the insured individual dies. In this way, the insurance company ensures that the family of the insured does not have to suffer financial problems even after an earning member of the family passes away. Hence, the policyholder should choose the nominee of his/her insurance policy carefully.

Types of nominees in life insurance 

The policyholder gets the choice of choosing one among the five types of nominees. Let’s understand them in detail. Here are the following five types of nominees in life insurance: 

  1. Beneficial Nominee

    IRDA has introduced a new term ‘beneficiary nominee’ instead of the nominee. It means that the policyholder has the right to make anyone his/her nominee. The nominee can be the policyholder’s parent/ guardian, child, or companion. If the policyholder has already chosen his/her nominee, then no dispute will arise in getting the claim.

  2. Minor Nominee

    The policyholder can make his/her minor child the nominee of his/her life insurance policy to secure the child’s future in his/her absence. But if the insured individual dies untimely, the amount of the claim will be payable to the legal custodian or the appointee of the child. The child’s custodian hands over that money to the child when he/she turns 18 years old.

  3. Non-Family Nominee

    It is also possible for the policyholder to choose a non-family member as his/her nominee. However, this is generally not recommended.

  4. Multiple Nominees

    Two or more two persons can be chosen by the policyholder under the multiple nominees of the insurance policy. In this case, the policyholder divides the share of the total amount between the two nominees. If the policyholder doesn’t divide the amount while filling the nomination form, then, the amount of the claim is divided equally between the nominees by the insurer.

  5. Changing Nominee

    Under this type of nominee, the policyholder is able to choose his/her nominee during the life insurance policy tenure.

  6. Successive Nominee

    Under many circumstances, people prefer choosing more than 1 nominee, in successive nominations, one can choose up to three nominees. After the death of the insured, the 1st nominee will receive the death benefit. In case the 1st nominee is also dead, the death benefit will go to the 2nd nominee and so on. 

Important things to know about nominations 

There are a few quintessential things about the nominations that every policyholder must keep in mind. The important things that should be known about nominations are given below: 

  • The life assured and the policyholder should be the same in the life insurance policy for the process of nomination. If they are two different persons, then, the claim benefits will be taken by the policyholder of the insurance plan.
  • The nominee has no right to request any kind of change in the insurance policy.

What is an assignment in life insurance?

Under Section 38 of the Insurance Act, 1938, there is a provision for assignment in life insurance. The policyholder transfers the rights of his/her policyholder to another person. The person who transfers the insurance rights is called the assignor and the person to whom the policy rights are transferred is called the assignee. In this way, the assignee becomes the owner of the insurance policy. 

Generally, the people choose banks for assigning their policy rights. The bank becomes the policyholder but the life assured of the insurance policy is not changed. The benefits of the claim are received by the bank (policyholder). 

Types of assignment in life insurance 

There are two types of assignment in life insurance i.e. Absolute Assignment and Conditional Assignment.

  1. Absolute Assignment

    In the absolute assignment, the rights of the life insurance policy are given to another person (assignee) without any terms and conditions. Generally, this type of assignment is done by the policyholders to show love for someone or to repay the bank loan.

  2. Conditional Assignment

    In a conditional assignment, the policyholder (assignor) transfers the rights of the life insurance policy to another person (assignee) under certain terms and conditions. If the terms and conditions are fulfilled, only then, the ownership of the policy will be transferred. 

Important things to know about assignments:

Check out the essential things about the assignment that you must not forget to keep in mind:

  1. Only the owner of the policy is changed in the assignment. The life assured will remain the same
  2. The policyholder of each insurance plan can transfer the rights of the insurance policy to the assignee. Only the pension plan and the insurance plans that are bought under the Married Women’s Property Act (MWP) are excluded
  3. The nomination of the insurance policy is cancelled if the policyholder gives the rights of his/her insurance policy to the insurance company for paying the insurance company’s loan.

Differences between nominations and assignments:

The table given below gives you a quick insight into the several differences between nominations and assignments.





The insured transfers the rights of his/her insurance policy to the assignee (person/entity) with or without terms and conditions.

The insured chooses the nominee for his/her life insurance policy benefits.

Policy Rights

The assignee gets the complete rights of the insurance policy. He/she can transfer the policy rights to the third person as well.

The nominee has no right over the insurance policy of the insured.

Claim Benefits

The claim benefits are enjoyed by the assignee of the life insurance policy if the insured dies. The assignee becomes the nominee of the insurance plan.

The claim benefits are enjoyed by the chosen nominee. The nominee can be changed by the insured during the policy tenure.

Maturity Benefits

When the insurance policy gets matured, all the benefits are directly enjoyed by the assignee of that policy.

No maturity benefits are enjoyed by the nominee if the policyholder is alive till the end of the policy tenure.

Legal endorsement

Assignment is a legal endorsement. It needs to be changed only as an endorsement on the original policy bond by the insurer.

There is no legal endorsement of a nomination. It can be changed by a simple email or a letter.


There is the requirement of witnesses.

There is no requirement for the witness when the insured chooses the nominee for his/her life insurance policy. If the nominee is a minor, an appointee would be required for the same.


It is very important for the policyholder to know about assignment and nomination. This is because the nomination and assignment have their own benefits that the policyholder can enjoy without any ado. Therefore, a piece of complete information has been shared with the help of this article. It is recommended to the policyholder to choose the right life insurance policy that can serve their family members even in their absence.


  1. What is the meaning of endorsement in the assignment?

    The policyholder has to sign the endorsement while transferring the rights of his/her insurance policy to the assignee. The sign of one witness is also required. Thereafter, the policyholder (assignor) has to mention precisely the reasons for transferring the rights of the insurance policy. The terms and conditions are also mentioned in the form (if any). Furthermore, the details of the assignee are also included in the form. 

  2. What are the liabilities and rights of the assignee?

    The liabilities and rights of the assignee are different on the basis of the types of assignment. In the absolute assignment, the right of policy ownership, responsibility to pay future insurance premiums, and the right of getting maturity benefits are transferred to the assignee. But in the conditional assignment, these rights and liabilities are determined as per the terms and conditions. 

  3. When does the insurance company cancel the nomination in the assignment process?

    When the assignor assigns the rights of the insurance policy to the assignee, then the nomination is cancelled by the insurance company. The nomination is not cancelled if the assignment is temporary. In that case, the rights of the insurance policy will be given back to the insured when he/she will pay the loan. 

  4. Who can become the assignee of my insurance policy?

    The assignee of the insurance policy can be a person or a financial institution. There should be an insurable interest between you and the person/financial institution. The assignee is either temporary or permanent. In some cases, the insured chooses the financial institution or insurance company as the assignee on some terms and conditions. But after some time, when the loan is paid, the insured will become the owner of the insurance policy again.

  5. When does the insurance company accept the assignment?

    If the insurance company finds that there is an insurable interest between the assignor and assignee, then the assignment is accepted. The insurance company makes sure that the assignment is not against the public interest and also not for trading purposes. The assignment should be in the interest of the policyholder only.


This article is issued in the general public interest and is for educational purposes only. The blogs should not be used as a substitute for competent expert advice from a licensed professional to best suit your needs. Insurance is a subject matter of solicitation. For more details on policy terms, conditions, exclusions, limitations, please refer/read policy brochure before concluding sale.

Is Suicide Covered Under Life Insurance Policy

Life insurances are your safety protocols. They are to support the family after their family member’s demise financially. But what if the insured individual dies by suicide? Will the assured sum still be paid to their family? Does life insurance pay for suicidal death in India?

Most policies cover suicidal deaths also. However, the death benefits are only available if the policy matures for 12 months, provided all premiums are paid. Even though unexpected events do not cause the death, the insurance company pays the assured sum to support the family on their loss. 

The insurer will provide no claims if they don’t approve the life insurance suicide cover in its policy. Therefore, It’s important to read the terms and conditions of the policies carefully before investing in them.

Types of life insurance provide suicide coverage

  • Most insurance plans excluded suicidal deaths and denied claims until 2014
  • Indian Regulatory and Development Authority of India (IRDAI) introduced a few major alterations in the regulations and allowed suicidal benefits under certain conditions
  • All types of insurance plans that include life as an element, such as wealth plans, savings plans, term life insurance plans, etc., provide suicidal death benefits
  • These insurance plans have rulings similar to that of the term life plans
  • However, a Unit-linked Insurance plan (ULIP) alone varies the value of return funds

How does the suicide clause work?

The suicidal clause provided death benefits to the beneficiaries of the insured individual if he/ she commits a suicidal death. The insurers provide these claims only if the insured individual dies after 12 months of the policy inception or reinstatement or revival of a lapsed plan.

Sometimes an insured individual purchases different loans and insurance policies to cover his/ her loans. Later they commit suicide, leaving the insurance company to pay the insurance money towards their loan. Strict regulations against suicides tend to limit such unethical activities and hence save the insurer from loss.

Provisions of suicidal death under the general insurance

The general insurance works under regulations before January 2014. Since suicidal death is a voluntary action, the insurance company regulates certain terms and conditions to avoid any fraudulent activities. 

According to the clause, general insurance does not provide any claim or suicide cover if the insured individual commits suicide within 12 months of purchasing the insurance plan. The insurance becomes void, and no funds are paid to the beneficiaries. The surrender value for death after 12 months also varies depending on the company policies. 

Why does an insurance provider provide suicidal claims?

Since suicide is a deliberate death decision, many may still wonder why does life insurance pay for suicidal death in India. Most companies answer these queries with empathy.

  • The insurance providers believe that any financial support during the loss of a family member can ease their grieving situation.
  • Most often, suicides happen due to financial debts and distress. In such cases, these funds can reduce the burden and provide moral support.

Exclusions of suicide cover under term insurance 

Even though suicide is not an accidental death, some insurance providers allow life insurance suicide cover. However, the insurance provider includes a few exclusions to avoid fraud. A few of those exclusions are mentioned below.

  1. If the insured individual dies due to suicide within the 12 months from the opening of the insurance policy, then no death benefits are provided. The beneficiaries receive 80% of the premiums paid within those 12 months.
    • This exclusion clause is not applicable if the insured individual is under 8 years of age.
  2. If the suicidal death of the insured individual occurs within the 12 months from the revival of the insurance policy, even then, no claims are provided. The insurance provider pays the beneficiaries more than 80% of the premiums the insured individual pays during their lifetime.
    • This clause is not applicable if the insured individual is under the age of 8
    • No funds will be paid if the premium isn’t paid under the policy.

New provisions as per life insurance plans:

Term insurance plans have updated their policies after January 2014 to meet the needs of their customers. The updated life insurance suicide clause provides financial aid to the beneficiaries even if the policy is under 1 year from the year of commencement.

According to the new provisions, 

  • If any insured individual purchases, revives or commences an insurance policy suicide within the 12-month timeframe, the family will still receive a certain amount. 
  • The value can either be 80% of the premiums paid by the insured individual or the surrender value of the policy, whichever is higher. Confirm the same from your insurer. 

Eligibility conditions to claim a suicide cover:

All Indians are eligible to have insurance plans and are eligible for suicidal cover also, provided the insurance provider mentions the suicidal benefits in the policy clauses. 

Under certain circumstances, the insured individual will not be eligible to receive any claims under the life insurance suicide clause. No claims are provided if,

  • The insured individual indulges in illegal or fraudulent activities during their lifetime.
  • The insured individual provides wrong or misleading information about themselves in the policy.
  • The insured individual’s account is insured under a group insurance policy. 


The death of any individual is grieving. Apart from the emotional loss, the demise of any family member creates a long-lasting impact on the lives of their loved ones. Even though the life insurance suicide cover provides financial support to the family after the insured individual’s death, that doesn’t make suicide right in any terms!

What if the insurer rejects/ denies to provide the assured sum? Are you going to let your family suffer in your absence? What about the emotional trauma they go through in your absence? Are they worth it? 

However, at unforeseen events, suicides happen. Even though there are so many awareness campaigns, it finally depends on those few decision-making moments. Make sure you read the policies before signing them, so your family receives the maximum benefit from them.


  1. What is a suicidal cover?

    The suicidal cover refers to the assured sum paid to the Insured individual’s beneficiaries after their suicidal death. This clause is only effective if the policy matures for over 12 months and the insured individual pays his premium regularly.

  2. Does group insurance allow suicidal death benefits?

    Generally, in a group insurance policy, members don’t get the benefits of suicidal cover after their death. It is recommended that you inquire about the same from your insurer. 

  3. How to claim the insurance benefits of the insured individual after their suicide?

    The beneficiaries can claim the funds by providing the necessary documents to the insurance company. The insurance provider will request the insured individual’s death certificate and confirm the reason for death, whether it was a voluntary death or not. Later the assured sum is paid to the family members.

  4. What happens to the loan taken against the insurance after suicidal death?

    The insured individual can take loans against their insurance policy. If they die due to suicide during their policy period, then the insurer will repay the loan on behalf of the insured from their assured sum, provided they have mentioned such clauses in their policies.


This article is issued in the general public interest and is for educational purposes only. The blogs should not be used as a substitute for competent expert advice from a licensed professional to best suit your needs. Insurance is a subject matter of solicitation. For more details on policy terms, conditions, exclusions, limitations, please refer/read policy brochure before concluding sale.

Difference Between Annuity & Life Insurance

Life is full of surprises. Understanding and planning before any unforeseen events give you the benefit of financial stability. Knowing your financial requirements and retirement plans can give you an upper hand in choosing the optimal insurance scheme. Both life and annuity insurance are great long-term insurance schemes. However, they differ in their meanings, benefits, terms and conditions.

Life insurance provides financial support to your loved ones after your death. It has monthly premiums, and rider advances. Annuity, on the other hand, is a retirement scheme that provides financial security to you after your retirement age. 

In other words, life insurance is helpful if you die before your policy term period, whereas the annuity is helpful if you outlive your tenure period.

What is a life insurance policy?

Life insurance is a contract between you and your insurer. The contract sets out how much coverage you have purchased and any other important details. A life insurance policy consists of many different components that fit together to create the overall insurance contract. The information you provide when you apply for a policy is one of those components. To enforce the contract, the life insurance application must correctly state the insured’s previous and present health issues and high-risk behaviours.

How does a life insurance policy work?

When working out annuity vs term life insurance, it is important to understand the working of each. The life insurance policy provides financial support to the insured individual’s family after the individual dies. The insurance policies are secured contracts. They provide financial benefits to help the family bear the financial loss that the death of the insured would cause.

  • The insured individual must pay a premium in instances of 12 or as yearly premiums, depending on his/ her preference
  • If the insured individual dies during the term of the policy, then the assured sum goes to the appointed beneficiaries
  • Some types of insurance plans also provide maturity benefits. The insurance company pays the assured funds if the individual outlives the policy tenure
  • The beneficiaries must make a claim to receive the assured sum
  • The funds can be claimed by providing the death certificate of the insured individual. Once verified, the beneficiaries receive the funds.

Types of life insurance policies

Life insurance is important and offers a broad scope of coverage. A life insurance policy’s principal goal is to safeguard your family’s financial security when you pass away. Thus, before deciding to take the life insurance, check on the types of life insurance and what each life insurance has to offer.

The different types of life insurance plans are:

  1. Term Life Insurance:

    Term life insurance provides basic coverage that allows you to select the length of time you need it. This is a great way to protect your family in the event of your untimely death. Term policies are great for financially independent adults who don’t want or need coverage beyond the amount selected. Term plans are pure life insurance plans with no maturity benefit.

  2. Endowment Plans:

    There is a death as well as maturity benefit in endowment plans. It provides coverage for your untimely death along with an element of savings. These plans can be pure endowment plans, money-back plans, child plans, etc. However, these plans are traditional insurance plans with guaranteed benefits along with bonuses, if applicable.

  3. Unit Linked Insurance Plans:

    In these plans, the policyholder can choose to participate in the market through investments. Here there are no guaranteed benefits as both the death as well as maturity benefit would depend on the market performance, subject to a minimum of the pre-defined sum assured.

Benefits of life insurance policies

Let us take a look at the benefits of a life insurance policy that you can expect to receive:

  1. Protection against Mishaps

    Having a life insurance policy gives your and your family a secure future. It also safeguards the interest of people whose incomes are slightly decreasing with increasing age.

  2. Tax Benefits

    This area of life insurance policy provides the policyholder with tax benefits. The Income Tax Act under Section 80C provides that the death benefit, or amount received as proceeds under life insurance, is exempt from tax. The premium paid toward the life insurance policy can also be claimed up to INR 1.5 lakhs.
    Also, the maturity benefit, wherever payable, is tax-free under section 10(10)D subject to the terms and conditions.

  3. Loan Options

    Most life insurance companies, especially endowment plans, give you the benefit of taking a loan against the policy if you are in need of money upto 80-90% of the surrender value of the plan.

  4. Assured Income

    This section provides your family with an assured income. You can choose a lump sum payout at the time of your death, at a regular time interval or a combination of both. With this money, they can pay electricity bills, house rent, children’s school fees and many other things. This means even after your death your family will be fully financially secure.

What is the meaning of Annuity?

An annuity synonymously with ‘pension’ is a series of regular, predictable cash flows guaranteed for the rest of your life. This is done by making a lump sum/ systematic investment. The payment you receive is generated from the investment that is done by the financial company. This is a good choice of income after retirement that gives you the freedom to plan your retirement. You can choose the frequency of your pension, it can be monthly, quarterly, half-yearly or yearly. 

How does an annuity work?

An annuity plan is a long-term investment scheme. Here the insured individual must pay a lump sum or a series of payments and receive funds regularly from the insurance company.

  • An annuity is an income provided to the annuitant after the vesting age.
  • So, once you invest in an annuity plan, you need to choose the age from when you wish to receive the annuity. Usually, that is closer to 55 to 60 years of age. This is called the “Vesting Age”
  • The time from when you invest till the vesting age, is called the Accumulation Phase, wherein you are expected to create your annuity corpus from where you would be provided with an annuity according to your choice.
  • At the time of vesting, you have the option of choosing the “type” of an annuity from the available options such as:
    • Life Annuity, i.e. annuity would be paid to the annuitant as long as he lives but nothing would be paid to the nominee after his death
    • Joint Life Annuity, i.e. annuity would be paid to the annuitant as long as he lives and after his death, the annuity would continue to be paid to the spouse as long as she survives. However, once both die, the policy would be terminated and nothing would be paid to the nominee
    • Life Annuity with Return of Purchase Price, i.e. annuity would be paid to the annuitant as long as he lives and after his death, the nominee would receive the entire purchase price as death benefit and the policy would be terminated.
    • Joint Life Annuity with Return of Purchase Price, i.e. annuity would be paid to the annuitant as long as he lives and after his death, the spouse would continue to receive the annuity. When both die, the nominee would receive the entire purchase price as a death benefit and the policy would be terminated.
    • Annuity Certain of 5/10/15/20 years, i.e. the annuity would be paid for a minimum of 5/10/15/20 years and then as long as the annuitant survives.

Types of Annuities 

Annuity is classified into two main types: immediate annuity and deferred annuity

  1. Immediate Annuity

    Immediate annuity gives you the benefit of immediately receiving the payments after your very first investment. Unlike other types of annuities, the payment can be received immediately, often with interest, which makes this instrument attractive to people who want to plan their future pension income.

  2. Deferred Annuity

    A deferred annuity agreement is a form of an annuity in which the annuity/ income is not available to the investor until a date in the future, at the vesting date. At the time of vesting, the annuitant can withdraw a maximum of 1/3rd of the total corpus tax free under section 10(10)A and need to opt for an annuity from the remaining 2/3rd of the corpus.

Benefits of Annuities

Buying an annuity has many benefits, the biggest being the peace of mind for retirement or as a way to supplement retirement. Some of the major benefits of annuity include

  1. Tax-efficient:

    The premium paid towards deferred annuity plans is tax-free under section 80CCC of the Income Tax Act 1961 upto INR 1.5 lakhs a year.

    At the time of vesting, the annuitant receives an option of withdrawing 1/3rd of the entire corpus tax-free u/e 10(10)A which can take care of the immediate retirement expenses. The remaining amount has to be converted into an annuity, which is taxable in the hands of the annuitant.

  2. Flexibility

    The timing of starting your annuity is flexible, allowing individuals to defer the purchase of an annuity until later in life when their retirement income goals may have a smaller impact on lifestyle adjustments.

  3. Growth in income

    Annuities can provide the substantial income that individuals are seeking to supplement or replace their income.

  4. Intergenerational equity

    An annuity allows the annuitant to be provided with dependable income for its expected lifespan. You have the confidence that even after you stop working, you will be able to live your second innings with pride without having to depend on anyone else financially

Differences between life insurance and annuity plan

Both annuity and life insurance are great financial plans. Despite the saving options and similar ideologies, they differ in many aspects. Understanding these differences will help you make the best choice to invest your funds.

Annuity plan


Life insurance plan

Annuity provides income support for the spouse and oneself.


Life insurance benefits the loved ones/ family members.

An annuity can be deferred after a few years of investments


Life insurance cannot be deferred.

It works after you or your spouse outlive the tenure period

When does it work?

It works after the death of the insured individuals.

It holds benefits of life cover also

Possibility to convert in future

Does not provide annuity cover

Annuity payouts are taxable

Tax benefits

Payouts are not taxable u/s 10(10)D

Premiums are based on the insured individual’s life expectancy


Premiums are based on the mortality of the insured individual

Ensure income for the insured individual and their spouse during their lifetime

Income security 

Ensure income to the family member or loved ones after the insured individual dies.


What to choose between life insurance and annuity?

When comparing life insurance vs annuity, the key factor is to determine the purpose of buying the financial product. Before choosing any such plan, assessing your financial well-being and requirements is ideal. Knowing your future needs and priority, you can opt for life insurance or an annuity plan. 

Life insurance provides financial support to the family after your death. It can take care of your loved ones’ everyday expenses and other financial needs. Annuity plans provide a regular income to you and/ or your spouse once you retire/ stop working. It is a retirement plan to benefit yourself in your elderly age when you are no longer employed.

Life insurance benefits your family if you die prematurely, whereas annuity benefits you to live comfortably in your retired life. 


Financial stability is vital in all phases of life. Depending on your priority and financial requirement, you can opt for life insurance or annuity plans. Both plans provide great benefits to the insured individual one way or another. 

Tackling unexpected events can be difficult, especially if it’s a matter of life and death. Make sure you plan on how you save your funds so that when such unforeseen events occur, you have the basic support to control the extent of damage that might occur. 

If you want to provide financial stability for your family in your absence, then life insurance is a great choice. However, an annuity will be the ideal option if you want to secure your retirement plan.


  1. What if the insured individual dies in an annuity plan?

    Depending on the kind of policy opted, the assured sum is provided to the beneficiaries on the insured individual’s death. Similarly, the annuity may/may not continue for the spouse. For the same reason, it’s important to mention the details of the beneficiaries in the annuity plan to ensure it reaches the right hands instead of landing in any financial institution.

  2. Can annuity plans be considered life insurance?

    Even though an annuity can cover death after the individual dies, it cannot be considered life insurance. It’s rather the exact opposite of life insurance. In life insurance, you ensure to get benefits after your death, whereas in an annuity, you provide financial benefits when you outlive your life expectancy.

  3. What are the benefits of buying life insurance instead of an annuity plan?

    Life insurance provides death benefits and tax exemptions, whereas annuity plans do not provide such benefits. However, one would not be able to suffice and thus it is suggested that you weigh the pros and cons of each before making an investment.


This article is issued in the general public interest and is for educational purposes only. The blogs should not be used as a substitute for competent expert advice from a licensed professional to best suit your needs. Insurance is a subject matter of solicitation. For more details on policy terms, conditions, exclusions, limitations, please refer/read policy brochure before concluding sale.

Difference Between Participating & Non Participating Policy

Introduction to Participating and non participating Life Insurance Plans:

Life insurance plans have several clauses and terms and it is quite obvious that you may not be familiar with all of these terms. Two very evident terms are participating and non participating insurance. Now, what exactly are they and how do they differ from each other? 

The profit provided to the policyholder is the primary difference between participating and non participating life insurance plans. On the one hand, the insurance company, under a participating life insurance plan, is liable to share the profit of insurance with the policyholder. However, under the non participating life insurance plan, the insurance company does not have to share any profit with the policyholder apart from the maturity benefits of the plan. Let’s understand them in detail in the further sections of this article. 

What is a Participating Life Insurance Plan?

You may have heard or read the term participating life insurance plan. So, what does the term ‘participating’ imply? First of all, you must know that it is also known as a ‘Par Life Insurance Plan’. Participating plans mean the life insurance plans “participate” in the company’s bonus. Thus, these plans are more expensive than non participating ones.

Under the Participating Life Insurance Plan, the insurance company is obliged to provide the policyholder with their share of the profit. Over the period, the insurance company makes a profit from the insurance premium paid by the policyholders. Because the policyholder is also participating in this plan, the company will share this profit in the terms of dividends or bonuses.

Technically participating life insurance plans are endowment plans with bonuses. The bonus could be a simple reversionary bonus, compound reversionary bonus, interim bonus, final additional bonus or terminal bonus. All bonuses depend on the performance of the company declared on an annual basis. It also depends on the type of the plan and the policy tenure. 

Even money-back or child plans can be participating in nature as there is a bonus component in some plans. 

How do participating plans work?

How does a Participating Life Insurance Plan work? How do you get it and how can you make use of it? The profit of a participating insurance plan is an additional benefit. The maturity benefit is also provided along with it. Let’s see how you can make the most of your insurance benefits-

  • The policyholder can choose to receive the participating insurance benefits in the form of payouts as and when agreed with the insurance company.
  • The benefits of participating benefits, received in the form of dividends or bonuses, can also be deposited to earn interest on it.

So, participating endowment plans have their maturity benefit defined as sum assured + accrued simple reversionary bonus + terminal/ final additional bonus, if applicable. In case of death of the insured within the policy tenure, even death benefit is paid out along with accrued bonuses and interim bonus, as the case may be, to the nominee.

Just to give you an idea, here is a reversionary bonus component of LIC (2020-21). The bonus rates are given as per INR 1000 of the Sum Assured.

Plan Name

Policy tenure

For Sum Assured <= INR 1 lakh

For Sum Assured > INR 1 lakh

Endowment Type Plans (Tables mentioned, i.e. plan names)

Less than 11 years



11 to 15 years



More than 15 years



Money Back Plans

20 years



25 years



So, in a participating endowment plan of 20 years with Sum Assured of INR 5 lakhs, the bonus declared is INR 38 per 1000 of Sum Assured, i.e. 38/1000*5,00,000 = INR 19,000. So, the maturity payout would be Sum Assured + declared bonus, i.e. INR 5 lakhs + INR 19,000 = INR 5,19,000. Thus, in this participating endowment plan, INR 5,00,000 was guaranteed but INR 19,000 was dependent on the company’s bonus rate declaration.

Non participating plan in life insurance 

In the non participating life insurance plan, the life assured is not able to take advantage of the profits of the insurance company that are earned by that company during the financial year. Therefore, the non participating plan is also known as a non par policy plan that does not offer payouts or dividend profits to the life assured. But the benefits of the insurance policy that are given to the life assured are pre-determined. These benefits are enjoyed by him/her when the insurance policy gets matured. They are not affected by the insurance company’s profit and loss in any way. 

Working of non participating plans 

The non participating plans are guaranteed benefits’ endowment plans without any element of bonus involved. So, the payout to the policyholder in case of maturity or earlier death is not affected by the insurance company’s financial condition. So, whether the insurer makes a profit or not, whether it declares a bonus or not, does not affect the predefined payout in a non par endowment plan.

In a non par endowment plan, the policyholder will receive a pre-determined maturity benefit at the end of the policy tenure. On earlier death, during the policy tenure, the nominee will receive the entire sum assured and the policy would terminate. There is no bonus payable in either case.

Differences between participating plans and non participating insurance plans:

Check out the differences between the participating and non participating life insurance plans to better understand the two-


Participating Plan

Non participating Plan


In the participating plan, the policyholder shares the profit of the insurance company. Therefore, this policy is also known as the policy with profit. 

In the non participating plan, the policyholder does not share the insurance company’s profit. Therefore, this policy is also known as the policy without profit.

Risk Oriented

This is a risk-oriented policy as the policyholder’s benefits do depend on the company’s profitability. The bonus component depends directly on the company’s profitability and is declared every year.

This is not a risk-oriented insurance policy as the policyholder’s benefits do not depend on the company’s profitability.

Guaranteed Maturity Benefits

The life insured receives a maturity benefit defined as sum assured + accrued simple reversionary bonus + terminal/ final additional bonus, if applicable. Bonus depends on the company’s profitability.

The life assured gets guaranteed returns when the insurance policy matures as the non participating plan is subject to the company’s profitability.

Death Benefit

Depends on the company’s profitability as Death Benefit = Sum Assured + accrued Bonuses + Interim Bonus, if applicable

Does not depend on the company’s profitability as Death Benefit = Pre-defined Sum Assured.

Non-guaranteed vs guaranteed benefits 

The non participating life insurance plan offers guaranteed benefits to the life assured. These benefits are enjoyed by the life assured when the policy matures. However, if the life assured dies within the policy tenure, then these guaranteed benefits are given to the nominee.

On the contrary, the participating life insurance plan offers non-guaranteed benefits to the life assured. These non-guaranteed benefits are given in the form of bonuses based on the insurance company’s annual performance. 


When planning to invest in a life insurance plan, you must understand each term so you do not have any confusion. Carefully analyze and then choose one among the par or non par life insurance as per your future financial goals. Typically participating plans are better especially if you have faith in the life insurance company that it will do well in the future, but since it is slightly more expensive than non participating plans, you need to choose according to your requirement. In the end, do not forget to give a thorough reading of the final insurance terms so you do not miss out on anything important. 


  1. What is a participating life insurance plan? 

    A participating life insurance plan or par life insurance shares the benefit of the life insurance between both the insurance company and the policyholder. It is paid in the form of a bonus or dividend. 

  2. What is a non participating life insurance plan?

    Under a non par life insurance plan, the policyholder is not entitled to receive any profit from the insurance apart from the maturity benefit of the plan. However, this is a non-risky plan as the benefit received is not affected by the profit made by the insurance company. 

  3. Is it risky to invest in a life insurance plan?

    Life insurance plans are considered to be one of the safest investment options. When considered par and non par insurance, the former is riskier compared to the latter. So, based on your requirements, you may choose one. 

  4. Can I use the benefits of participating in life insurance to pay my premiums? 

    Yes. The bonuses received as the profit of the par life insurance plan can be used by the policyholder to pay off their next premium. 

  5. Which is better: participating or non participating life insurance plan? 

    Both the plans have their pros and cons. On the one hand, you receive additional benefits under participating life insurance; on the other hand, there is no additional benefit under non participating life insurance. However, non par is also a non-risky plan when compared to the participating insurance plan. Thus, choosing one of these plans depends on your financial goal, risk appetite, and budget. 


This article is issued in the general public interest and is for educational purposes only. The blogs should not be used as a substitute for competent expert advice from a licensed professional to best suit your needs. Insurance is a subject matter of solicitation. For more details on policy terms, conditions, exclusions, limitations, please refer/read policy brochure before concluding sale.

What Is General Provident Fund (GPF): Know How it works & Benefits

The provident funds allow residents to save funds for retirement with monthly deposits and calculated interest. There are three provident funds, namely, the general provident fund (GPF), the public provident fund (PPF) and the employee’s provident fund (EPF). All the three funds vary in their policies, eligibility, terms and conditions.

General Provident Fund or GPF is a type of provident fund. It’s basically a retirement saving scheme to help Indian government employees to save funds for their retirement. Non-government employees cannot contribute to this scheme.

This article will focus on the general provident fund, its features, benefits, eligibility, and procedures.

What is GPF?

GPF is a savings plus retirement scheme for the government employees of India. All the government employees working at different sectors and levels are eligible to benefit from this scheme. They can contribute a certain amount of funds from their salary monthly. 

The policy allows employees to save funds on a monthly basis and accumulate the funds and their interest for their retirement. Thus, providing financial security at their elderly age. 

These funds are secured and risk-free due to the government’s backup. GPF also provides tax deductions under Section 80 of the Income-tax Act. Furthermore, the interests earned from the GPF provident funds are tax-free.

The interest rate of the General Provident Fund

The interest rates of the GPF are regularly updated by the Department of Pension and Pensioners’ Welfare of India. Ever since its launch in 1968 the Ministry of Finance has regularly updated the interest rates according to the financial needs. 

  • All sectors of government employees receive the same interest rate
  • The interest rate for GPF for the financial year 2021-22 is 7.1%. It is reported that for the last 15 years the interest rates are fluctuating between 8%-7%.

General Provident Fund Features 

  • GPF Provident Fund is operated by the Department of Pension and Pensioners Welfare. This department is transparently managed by the Ministry of Personnel, Public Grievances, and Pensions.
  • All the government employees including temporary (after offering one year’s service), and permanent are eligible to subscribe to the GPF Provident Fund.
  • The subscriber of the GPF Provident Fund is required to make his/her family member nominee while filling the prescribed form of the fund. The subscriber can make one or more persons the nominee of his/her fund. The subscriber also decides the share of the payable amount between the nominees after his/her demise.
  • The subscribers of the GPF Fund get the interest of 7.1% on their deposited money.
  • On their last working day in the government office, the money from the GPF fund is transferred into the account of the subscriber.

Eligibility criteria for GPF:

The eligibility criteria to subscribe to the GPF Fund are given below:

  • The government employee should be a citizen of India.
  • After offering one year’s service in the public sector, temporary government employees including apprentices and probationers are eligible to subscribe to the GPF fund.
  • The employees of the private sector companies are not eligible for the GPF Provident Fund.
  • The government employees need to deposit a certain share of their salary to subscribe to the GPF Provident Fund. 

Steps to open a GPF Account:

The following steps are taken while opening the GPF account:

Step 1: 

Firstly, the eligible government employee needs to fulfil the form for GPF Fund.

Step 2: 

Then, that application form is submitted to the Account General of the state.

Step 3: 

After approval, an account number is provided to the subscriber.

Step 4: 

Thereafter, the procedure of monthly deduction from the subscriber’s salary is specified. The deducted amount is made to the DDO (Drawing and Disbursing Officer).

Step 5: 

At the end of the financial year, the subscriber is provided with the annual statement of the GPF fund including credits, debits (loan), accumulated interest (7.1 % interest rate), and closing balance. 

The withdrawal process of the General Provident Fund

Some key points to understand the withdrawal process of the GPF Provident Fund are given below: 

  • GPF funds mature when the government employee is retired. On the last day of work, the accumulated amount of the fund is credited into his/her bank account.
  • If the government employee has completed ten years of service in the public sector, then he/she can withdraw the accumulated GPF fund on account of various reasons i.e. marriage. education, medical treatment, construction, purchasing of the consumer durables, travelling expenses, etc. He/she can also withdraw the GPF fund amount within ten years before the date of retirement/superannuation.
  • If the government employee is leaving the job before retirement, then he/she is eligible to withdraw the amount from the GPF Provident Fund.
  • In case of the demise of the subscriber, the accumulated money of the GPF fund is claimed by his/her nominee. 

Difference between EPF, PPF & GPF

Even though EPF, PPF, and GPF all belong to the Provident fund category. They still differ in many aspects. Understanding these differences will enable you to choose the appropriate fund scheme that suits you and your lifestyle.

Here is a tabulation of the differences between these three provident funds.






Employees’ Provident Fund

Public Provident Fund

General Provident Fund

Eligibility criteria

People working in any company that has 20 or more employees

Include all the Indian resident individuals

Only Government employees and workers.

Interest rates




Maturity period

Up to 58 years of age

15 year period

Until retirement

Minimum Deposit range

10% or 12% of the salary or INR 1800

INR 500 per year

6% of their monthly salary

Maximum Deposit range

Its voluntary no completion is made

INR 1.5 lakhs per year

100% of their monthly salary

Premature closure

Being unemployed for more than 2 months

Only after 5 years of maturity, for educational and medical reasons

If the individual leaves their government job

Contribution amount of GPF

For the regular flow of contribution to the GPF provident fund the Ministry of finance has regulated a certain percentage of income to be allocated towards the fund. The Monthly contribution of the government employees is based on their salaries.

  • The minimum monthly contribution should be 6% of the monthly salary of the employee
  • The maximum monthly contribution is voluntary and can be even up to 100% of their salary.

Advances of GPF Provident Funds

GPF provident funds allow their subscribers to take advances from the accumulated funds. Let’s look into the provisions for advances of GPF and their rulings.

  1. The GPF subscriber can request an advance of their funds at any point in their career under certain grounds like medical needs, marriages, education and housing.
  2. The advances provided are generally around 12 months of funds or three-fourths of the accumulated funds, whichever value is less. However, under special conditions, even 90% of funds are also provided as advances.
  3. The sanctioning authority must pay the funds to the subscriber within 15 days from the request. No proof documents or procedures are required while applying for advances.
  4. The advance provided is expected to be refunded within 60 months of instalments. One can take multiple advances during their career. No interest shall apply to these advances.
  5. If the subscriber needs more advances with incomplete refunding of the previous advances, then the leftover funds are added to the new advance and the subscriber must pay the consolidated funds.

Government employees can do the savings easily with the help of the GPF fund. These savings help one day when the regular salary is not received after retirement. GPF fund helps the employees if they need money during their government service period for various purposes i.e. education of the child, marriage, renovation/construction of the house, travelling expenses, medical expenses, etc. Hence, those who want to have a safe and secure future should subscribe to the GPF provident fund. 


  1. How much of my salary will be deducted under GPF?

    The minimum deductible value is 6% of the government employee’s monthly salary. However, the subscriber can contribute more if they want.

  2. Are the funds under GPF taxable?

    GPF allows tax deduction under Section 80. No additional taxes are required to be paid over the interest amount that accumulates over the funds.

  3. Can I borrow money against GPF?

    You can request up to 75% of the advances from your GPF. No interests are calculated over these loans.

  4. What if I quit my job in between, what happens to my funds?

    When the subscriber quits their job they can withdraw the funds from GPF regardless of their career period. No additional charges or deductions are made over these premature withdrawals.


This article is issued in the general public interest and is for educational purposes only. The blogs should not be used as a substitute for competent expert advice from a licensed professional to best suit your needs. Insurance is a subject matter of solicitation. For more details on policy terms, conditions, exclusions, limitations, please refer/read policy brochure before concluding sale.

Sukanya Samriddhi Yojana (SSY): How It Works, Benefits & Features

Though the evil of gender discrimination still exists in India, things are changing slowly yet steadily. With girls competing in just about every field, be it academics, sports, or competitive fields. The societal role of girls is evolving. From time to time, the government also takes initiatives to uplift the status of girls and women. The “Beti Bachao aur Beti Padhao” campaign has been aggressively encouraged to abolish discrimination against girls. Sukanya Samriddhi Yojana plan is one such highly-applauded initiative by Prime Minister Narendra Modi for the welfare of the girl child. 

The scheme gives an investment opportunity to the parents of the girl child under the age of 10 years for their education and marriage finances. The program offers a doorway for every girl in the country to access education without financial constraints.

Sukanya Samriddhi Yojana benefits and features 

Along with educational and marriage financing, the Sukanya Samriddhi Yojana plan has many other advantages making it one of the best investment schemes for the female child.

  • Sukanya Samriddhi Yojana scheme is a small savings-based government scheme initiated in 2015 and the Beti Bachao, Beti Padhao Yojana campaigns. 
  • The scheme aims to protect and save the future of girl children by providing financial support.
  • Parents or guardians can start investing in the Sukanya Samriddhi Yojana plan on behalf of their girl child and save money for her future.
  • You can withdraw 50 % of the SSY account balance for higher education or school fees by submitting the educational organisation admission proof to cover the maximum education financing burden.
  • Affordable monthly investment, with a minimum deposit of INR 250
  • You can also enjoy tax exemption benefits on the amount received at the maturity under section 80 C of the Income Tax Act
  • Competitive interest rates, compared to other government investment schemes, the Sukanya Yojana has a high return interest rate of 7.6% p.a.
  • Flexible instalments, pay whenever you want and any amount according to your convivence
  • Available at any every government bank and post office near your home
  • Anyone with a girl child under 10 years of age can apply for the scheme
  • The scheme is suitable for people from every walk of society.
  • The deposits accumulate along with high-interest rates and can be withdrawn fully after 21 years or partially once the child turns 18 years.

Key Highlights Of Sukanya Samriddhi Yojana Scheme

Interest rates 

7.6% interest per annum 

Minimum deposit per annum

Rs. 250 per year 

If no deposits are made during a financial year, the accounts become default or dormant. To activate the account, a penalty of Rs.50 must be paid.

Maximum deposit per annum

INR 1,50,000. 

Maturity span

Tenure period extends for 21 years or until the girl child is 18 or married. However, deposits are required only until the first 15 years.

Eligibility criteria

Girl child 10 years or younger. Only two SSY plans are allotted for one family. Exceptions are given when twins or triplets of girls are born in the same family.

Tax benefits

  • Tax deduction up to INR 1.5 lakhs is allowed under Section 80C per year
  • The interest earned does not attract any tax
  • The maturity amount is tax-free

Interest rates offered by Sukanya Samriddhi Yojana:

To provide the maximum benefits for the girl child in terms of financial and educational benefits, the government allocates high-interest rates for the SSY scheme. 

  • Government usually assigns the interest rates every quarter of the annum
  • When it was introduced in 2015 the government gave an interest of 9.2% per annum
  • As of the financial year 2022 – 2023, the interest rates are 7.6% per annum
  • Regarding interest on the ‘Account under default’ accounts (those accounts where no minimal deposits were made during the entire financial year) the interest is added using the post saving accounts. However, this doesn’t apply when the guardian who opened the account is dead.

Calculation of Sukanya Samriddhi Yojana interest 

To understand the Sukanya Yojana benefits, it is important to understand the calculation of the Sukanya Samriddhi Yojana’s interest. With a fixed return of 7.6%, let’s see how the maturity amount can be calculated. The formula to calculate the amount is:

Amount = P(1+r/n)^nt


  • A stands for the Compound Interest
  • P stands for the Principal Amount
  • n is the number of times the interest is compounded in one year
  • t is the number of years
  • r stands for the rate of interest.

Sukanya Samriddhi Yojana Calculator 

The manual calculations may be cumbersome and quite time-consuming. However, if you wish to get an idea of the variable or the maturity amount, the best way to do so is through the Sukanya Samriddhi Yojana calculator. This free online tool comes in very handy and helps you plan ahead. 

You simply need to feed in the following details:

  • The yearly investment you wish to make
  • The age of the girl child 
  • The starting date/ period of the plan

In a matter of seconds, the calculator will show you: 

  • The total investment that you will make
  • The tidal interest that you will earn
  • The year of maturity of the scheme
  • The total maturity value

The calculator will give you an error-free output and you can use it changing the variables time and again. The online tool works efficiently on all kinds of devices. 

Working of Sukanya Samriddhi Yojana Account

Sukanya Samriddhi Yojana is a long-term scheme where a deposit of a minimum of INR 250 and a maximum of INR 1.5 lakhs can be made in a year. The tenure of the scheme is 21 years and it can be purchased for a girl child who is aged 10 years or less. Lets us take this example:

Rajiv and Sonali Mishra were recently blessed with a baby girl. They invested in the Sukanya Samriddhi Yojana when their daughter Megha was just a few months old. Till Megha turns 15, Rajiv will make a monthly/ annual deposit in the SSY. The money can, however, be withdrawn once Megha turns 21. It is for Rajiv to decide if he wants to pay after Megha turns 15, as the 15 to 21 years span requires only voluntary contributions. Once Megha turns 21 they can withdraw the entire amount.

There are also certain circumstances, where partial withdrawals can be made. We will discuss them ahead.

Let us take another scenario. If Rajiv and Sonali invested in the Sukanya Yojana, after Megha turned 5, then the plan would mature only when she completes the age of 26. Rajiv would have to make the contribution till she turns 20, and for the next 7 years, if he wishes to.

Withdrawal rules of Sukanya Samriddhi Yojana

On the maturity of the Sukanya Samriddhi Yojana scheme, the policyholder will get the amount directly to her bank account. But, in case of premature withdrawal, the deposit amount can be withdrawn before maturity only after five years of opening the account. Also, to claim a sum before maturity, you need to meet some criteria, let us take a look:

  • If you need money for your daughter’s higher education you can withdraw 50% of the account balance till the last financial year 
  • You can make a partial withdrawal if you are planning your daughter’s wedding

You can opt for premature closure of the Sukanya Samriddhi Yojana in the following circumstances: 

  • Death of the girl child
  • Death of the guardian of the girl child
  • The girl child becomes a citizen of another country
  • The policyholder is suffering from a life-threatening disease.

Eligibility criteria for Sukanya Samriddhi Yojana

To apply for Sukanya Samriddhi Yojana, there are a set of eligibility criteria for the girl child and the parent.

  • The girl child must not be older than ten years of age. Even though a one-year grace period of 1 year is offered, the parent can apply for the scheme before the girl turns 11.
  • It is imperative that the person opening and operating the account on behalf of the girl child can be her biological father or her legal guardian.

Documents required to open a Sukanya Samriddhi account:

To open a Sukanya Samridhhi account, you need to submit a set of documents for verification and authentication of the information filled in the application form.

  • Account opening application form
  • Birth Certificate of the girl child, as the age proof
  • Photocopies of the parent or the legal guardian
  • KYC documents for ID and address proof
    • PAN card
    • Driving Licence
    • Passport
    • Voter ID Card of the parent/legal guardian 
    • Job Card signed by a government authority
    • Adhaar Card.

Steps to open a Sukanya Samriddhi Yojana account:

Adults can collect the Sukanya Samriddhi Yojana scheme application form from the post office or any registered bank. They can also download the applications directly from the online portals. The adult is expected to fill the form with details needed and submit it back along with the reference proof documents. These include 

  • Name of the account holder or the child’s name
  • Name of the joint account holder or the name of the parent (or the guardian)
  • Child’s birth certificate
  • Identity proof of the parent’s or the guardian’s (like passport, Aadhaar card, driving license etc)
  • Details about the present and permanent address along with its proofs 
  • Details about the child’s medical history
  • Mentioning the initial deposit amount and its details like cheque or DD number and date.

Steps to fill Sukanya Samriddhi Yojana account form for the post office:

To open a Sukanya Samriddhi account, you can visit any authorised bank or post office branch associated with this scheme. Here are the steps you might have to follow when you apply in person.

  • Collect the application form from the authorised bank or post office.
  • Fill and submit the form with necessary details like the name of the child, name of the guardian or parent, address and contact information. 
  • You must also submit the supporting ID and address proofs
  • Deposit the first investment amount of Rs.250 up to Rs.1.5 lakhs to open the account
  • Once the details and funding are approved, the bank or the post office will activate your SSY account
  • Once you receive the passbook for the account, you can continue the scheme for the next 21 years.

How to make payment for Sukanya Samriddhi Yojana online?

To open a Sukanya Samriddhi account online, you must install the India Post Payments Bank (IPPB) application on your smartphone. Using this application, you can open and maintain your SSY accounts.

  • Download the IPPB app
  • Transfer funds from your bank accounts to the IPPB account
  • Open DOP products and click the Sukanya Samriddhi Yojana plan
  • Fill in the SSY account details and DOP user ID
  • Choose the instalment duration and investment amount
  • The app will inform you once the account is opened.
  • You can use the same application to deposit the funds every year.

Investment frequency under Sukanya Samriddhi Yojana :

You can either choose to deposit once a year or in instalments throughout the year. But, the minimum annual amount that you must deposit is INR 250. To keep the account active, you must deposit the minimum amount every year for 15 years. Payment intervals between instalments are flexible, and you can pay whenever you want. Furthermore, there is no limit to how many instalments you can make per year.

Sukanya Samriddhi Yojana Details in the passbook 

When you open a Sukanya Samridhhi Yojana account you get a passbook. There are no extra fees for the passbook. However, you should carry the passbook with you for depositing your regular or annual instalments at the bank. It is also necessary to submit the passbook at the time of account closure. Furthermore, make sure you update your passbook regularly to record every update of your SSY account. 

List of banks offering Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana plan can be availed from most government and private sector banks in India. It is also available at local post offices, making the scheme available even in remote and rural areas. You can also apply for the Sukanya Samriddhi Yojana online. Check out this list to know banks that offer the Sukanya Samriddhi Yojana.

  • Punjab National Bank
  • ICICI bank
  • Axis Bank
  • Bank of Maharashtra 
  • Dena Bank
  • Vijaya Bank
  • IDBI Bank
  • Bank of Baroda
  • Bank of India
  • Canara Bank
  • Allahabad Bank
  • Indian Bank
  • Punjab and Sind Bank
  • UCO Bank
  • State bank of India
  • Central Bank of India.

Difference between PPF & Sukanya Samriddhi Yojana, and which one is better?

When planning your investments, it is only prudent that you compare the options in detail before committing for the long term. While both the Public Provident Fund and Sukanya Samridhi Yojana are government-initiated, there are many differences in their features as well as the outcome. SSY is basically a welfare scheme for the girl child whereas the PPF allows the investor to earn tax-free interest. Let us take a look at their differences and then analyse their benefits:

Public Provident Fund


Sukanya Samridhi Yojana 


Rate of Interest


Minimum: INR 500

Maximum: INR 1.5 lakhs

Annual Deposit

Minimum: INR 250

Maximum: INR 1.5 lakhs

Up to INR 1.5 lakhs

Tax Savings

Up to INR 1.5 lakhs

15 years

Term of the Policy

21 years

Partial withdrawal can be made after 15 years


Partial withdrawal can be made after 21 years

Loan facility is available


Loan facility is not available



Not available

Now that you know the differences between the Public Provident Fund and Sukanya Samridhi Yojana, you would be in a better position to plan your finances. While the interest rates may seem quite similar, long-term investment can bring a lot of difference to the final corpus. Keep the pros and cons of both in mind when you compare them and make a well-informed decision.

Difference between Children’s Mutual Funds & Sukanya Samriddhi Yojana:

When it comes to planning for your child’s future, you would always want to make the best decision. With the rising costs of education, it is imperative that you start saving at the right stage. Investing in Children’s Mutual Funds or Sukanya Samriddhi Yojana can be a recurring question in your mind. Let us take a look at their key differences:

Sukanya Samridhi Yojana 


Children’s Mutual Funds 

SSY can only be opened for a girl child by a parent/ guardian

Account Opening

Parents can start investing in their child’s name

Done by parents/ guardian till the child turns 18, thereafter the child can assume control

Management of Account

Managed by the parents. Children’s mutual funds come with a 5-year lock-in period or till the child turns 18

Account can be opened only till the child is 10 years or below

Age Criteria

This kind of mutual fund can be opened for a child under 18 years

Sukanya Samriddhi Yojana is a government-backed scheme that offers you guaranteed returns. Children’s mutual funds on the other hand may seem lucrative because of the high returns they offer, but the element of risk cannot be ignored. So, what should you choose in such a scenario? 

While Sukanya Samriddhi Yojana is an excellent saving scheme, it may not be entirely sufficient keeping in mind the unabated increase in the cost of higher education. Financial experts advise that you follow a more balanced approach and invest in both these options. You have the security and tax-saving benefits of Sukanya Samriddhi Yojana, while Children Mutual Funds can offer you better returns. 

Steps to download the Sukanya Samriddhi Yojana statement

You can download the Sukanya Samriddhi Yojana statement from the bank’s online portals. However, all banks don’t provide these services. If the bank your SSy account is linked with allows you to download statements, then request the bank executives regarding the online account login details like the login ID and password.

  • Using the account details, log in to the SSY account from the online portals of the bank.
  • The dashboard or the homepage will provide you with your account statements
  • Download the details from the same page.

What happens upon less/excess payment for Sukanya Samriddhi Yojana account 

  • Less than the minimum deposit
    When the account holder doesn’t pay the minimum value of Rs.250 within a financial year, then the account becomes a ‘default account’. In order to activate the account, the account holder must pay an additional INR 50 as a penalty.
  • Excess the maximum deposit
    When the deposits made are over INR 1.5 lakhs then no interest will be included in the additional money deposited. You can withdraw the excess funds anytime you want.

How to transfer an SSY account?

You can transfer the SSY account from one branch to another within the country. Here are the steps you need to follow during the process

  • Visit the post office or the bank where you have opened your existing SSY account and request the transfer application
  • Fill in the details of the new branch you are planning to transfer the funds and submit it along with the passbook for approval.
  • Once approved, the bank will close the existing account and give the customer their bank statements and other details regarding the existing account. 
  • You must submit these documents to the new branch where you will transfer the account.
  • While opening the account in the new post office or bank, you must also submit additional KYC documents for further verification.


The SSY aims to uplift the lives of the girl child in India. With the Sukanya Samriddhi Yojana benefits like tax reduction and high-interest rates, the girl child is secured with financial support over its tenure phase of 21 years. 

Easy application and minimal investment options make these schemes viable for an average household. Joining the scheme can be the next best thing you can do to financially secure the future of your daughter.


  1. What is the online payment method for the Sukanya Samriddhi Yojana?

    SSY payment instalments can only be made online if you have IBPP installed on your smartphone.

    • Visit the IBPP app, navigate to the DOP products section and click on the Sukanya Samridhhi Yojana
    • Enter your DOP customer ID and SSY account number
    • Make the payment of the amount you wish to deposit
  2. How many accounts can be opened in Sukanya Samriddhi Yojana?

    Only one account can be opened for a female child. Also, only two girl children from a family can opt for Sukanya Samridhhi Yojana. But in the case of twins or triplets girls, more can two accounts can be opened.

  3. What are the steps to open the Sukanya Samriddhi Yojana account at the post office?
    To open a Sukanya Samriddhi Yojana account, you need to:

    • Visit your nearest Post Office
    • Fill in an application form and submit the required documents along with it
    • Pay the minimum deposit fee
    • The post office will check the form and approve your application
    • After approval, your account will be opened
  4. What is the Sukanya Samriddhi yojana transfer procedure?

    In order to transfer the account, follow the steps given below:

    • Visit the Post Office or Bank in which you have your SSY account
    • You will need to fill in the account transfer form, submit the required KYC documents
    • The bank/post office will verify and send the original KYC documents to the bank/post office you want to transfer your account in
    • When the target bank/post office receives your documents, you can have your SSY account there.
  5. Is there a maximum amount that I can invest in the Sukanya Samriddhi Yojana?

    Yes, in a year you can make a maximum deposit of INR 1.5 lakhs.


    This article is issued in the general public interest and is for educational purposes only. The blogs should not be used as a substitute for competent expert advice from a licensed professional to best suit your needs. Insurance is a subject matter of solicitation. For more details on policy terms, conditions, exclusions, limitations, please refer/read policy brochure before concluding sale.

What Is Pradhan Mantri Kisan Maan Dhan Yojana?

Introduction to PMKMY:

The Indian Government launched the Pradhan Mantri Kisan Mandhan Yojana (PMKMY) scheme in August 2019 to provide social security and protection to the farmers in their old age. It is a voluntary contribution pension scheme for marginal and small farmers (SMFs) to assist them when they age and are too weak to earn. 

  • Farming is a tedious and energy-consuming profession, when farmers become old they lose their livelihood with little or no savings left behind. 
  • The PMKMY scheme allows farmers from ages 18 to 40 to apply and invest a small amount of INR 55 to INR 200 per month. 
  • These financial contributions are accumulated into their pension funds. 
  • The beneficiaries can claim their pension money once they reach 60 years of age. 

PMKMY Policy Details

Here are some of the key highlights of the PMKMY scheme and its policies.


To provide social security and protection to the farmers in their old age

Eligibility criteria 

  • Marginal and small farmers who own a minimum of hectares of land
  • The farmer must be between the age group of 18 to 40 years

Monthly deposits

Ranging from INR 55 to INR 200 depending on the age they joined the scheme

Maturity age of the beneficiaries 

60 years

Pension amount

INR 3000 per month


At any unfortunate events like the death of the beneficiaries, the spouse would be eligible to receive about 50% of the funds accumulated for pension every month 

Who can apply for PMKMY?

PMKMY or Pradhan Mantri Kisan Mandhan Yojna is meant for all marginal and small Indian farmers with land not greater than about 2 hectares. Let us take a look at who can apply for PMKMY and the eligibility criterion that have to be fulfilled:

  • The scheme is for small and individual farmers between the age of 18-40 years who have own cultivated land of up to 2 hectares as per the records of the state land
  • Candidates must have their own Aadhaar Card
  • Candidates should have a savings bank account or PM-KISAN account 

Who is not eligible for PMKMY?

Not every marginal or small farmer is eligible for PMKMY. There are some farmers who are not eligible, like 

  • Farmers who have chosen the PM-LVM or the Pradhan Mantri Laghu Vyapari Maan Dhan yojana monitored by the Ministry of Labour and Employment.
  • Small farmers and marginal Indian farmers who have already registered under any other schemes like National Pension Scheme, Employees’ Fund Organisation Scheme, or Employees’ State Insurance Corporation Scheme, are not eligible for this scheme.

Documents Required for PMKMY

Following are the documents required for PMKMY:

  • Residential Proof: The candidates need to provide authorised residential proof like the Aadhaar card, Voter ID card, or ration card. 
  • Age Proof: To become eligible for the PMKMY scheme, the candidate needs to provide a photocopy of his/her age proof.
  • BPL Certificate: The candidate needs to submit a photocopy of their BPL certificate. 
  • Registration Certificate: It is important to submit a photocopy of the farmer’s registration certificate by the candidate. The certificate will serve as verification that the applicant falls within the marginal category.
  • Land Documents: The farmer needs to submit documents related to his land at the time of registration.
  • Bank Account Details: the candidate needs to submit his bank account details at the time of registration.

Benefits of PMKMY

Here are the different types of benefits that are provided by the PMKMY:

  1. General benefits

    According to PMKMY, the candidate is eligible to receive a minimum of INR 3000 as a monthly pension directly in the registered bank account, as soon as 60 years is attained. This will secure the future of the candidate in his retired life.

  2. Death Benefits payable to the beneficiary’s family

    Along with financial protection the PMKMY provides death coverage to the candidate too. Only the spouse is eligible to get about 50% of the original pension if the eligible candidate dies.

  3. Disability Benefits to the family

    There are many cases in which the eligible candidate, with a regular contribution to the PMKMY scheme, becomes disabled permanently well before attaining 60 years of age. In such cases, the options are

    1. The spouse can choose to continue to participate in the PMKMY after the policyholder dies by making regular contributions as previously.
    2. The spouse can leave the Scheme at any time and get the contribution portion, as well as any interest gained on it. The amount of interest earned will be larger than the interest rate offered by a savings bank or the income generated by the Pension Fund.

Benefits for candidates leaving PMKMY

Even if you want to leave the Pradhan Mantri Kisan Maan Dhan Yojana before the scheme’s maturity, you can still enjoy some benefits.

  • If you want to leave the scheme before ten years of joining PMKMY, you would get back all your monthly deposits but with no interest.
  • Suppose you leave the PMKMY scheme after ten years but before 60 years of age. In that case, you will receive all of your deposit money with the accumulated interest.
  • If the farmer dies within the scheme tenure and the spouse wishes to leave the scheme; in that case, she can receive the total deposits along with interest.

Steps to apply for PMKMY:

  • Step 1
    Interested SMFs who are willing to join the scheme are requested to go to the nearest CSC, also known as Common Service Centre.
  • Step 2
    The candidate needs to submit the following documents:
    • Copy of their own Aadhaar Card
    • Account Number of their Savings Bank with the IFSC code mentioned(Bank Passbook or copy of the bank statement as evidence)
  • Step 3
    The candidate needs to pay to the VLE i.e. the Village Level Entrepreneur the initial amount in cash.
  • Step 4
    For authentication, the VLE would then input the subscriber’s Aadhaar number, name, and DOB as displayed on the Aadhaar card.
  • Step 5
    To finish the registration by filling out the form online, the VLE will want information such as bank account information, mobile phone number, email address, spouse (if applicable), and nominee information.
  • Step 6
    The system automatically determines the monthly payment due based on the applicant’s age.
  • Step 7
    The candidate must pay the VLE the first fee for the subscription in cash.
  • Step 8
    The system creates the Enrolment Form which is also the form for Automatic Debit, which the subscriber must sign. The same will be scanned and uploaded into the system by VLE.
  • Step 9
    The subscriber is granted a unique KPAN number. It is the Kisan Pension Account Number which is unique and also a Kisan Card with all of the relevant information is issued.

Registration Process of PMKMY 

You can apply for PM Kisan Man Dhan Yojana with the online portal or from the local Common Service Center (CSC). You can apply through CSC by following the below steps.

  • Visit your nearest Common Service Center (CSC). Make sure you carry your Aadhaar Card Bankbook and chequebook with you. 
  • To make the first contribution, you would need to pay it in the form of cash to the VLE
  • The VLE will verify all your documents and will note your name, DOB etc. for application to the scheme
  • After verification and formalities, the farmer will get a Kisan Pension Account Number and a Kisan card. 

How to check your name on the nomination list?

If you want to check if your name is under the nomination list of the PMKMY scheme

  • Go to the official online portal of the scheme
  • Head to the Pradhan Mantri Kisan Man Dhan Yojana section
  • To check your name in the PMKMY scheme, enter your Subscriber ID 
  • If you could not find your name, check your Subscriber ID again and submit it.

Premium chart for PMKMY:

This chart shows the amount of government contribution and what you will have to pay each month depending on your age:


Last premium Depositing age

Beneficiary’s Monthly Contribution

Monthly contribution by the Central Government

Total Monthly Contribution




















































































































Pradhan Mantri Kisan Maan Dhan Yojana aims to provide social security and protection to the hardworking Indian farmers. This government-based pension scheme envisions upgrading the lives of the marginal and small farmers for all the years of farming and harvesting they did.

To make sure the farmers save funds for their retirement and secure their social well-being, the KMPMY scheme can be a great start. With voluntary monthly contributions and an equally matching contribution from the government, along with its other benefits, farmers are assured of a safe and secured future.


  1. Who is not eligible to join PMKMY?
    Any individual already enrolled in some other government scheme is not eligible to apply for PMKMY. Also, a person under 18 years of age and over 40 years of age is not eligible. 
  2. How much will this joining the scheme cost me? How can I pay my instalments?

    There is no extra fee for joining the PMKMY scheme. You only have to pay the monthly contributions. You can either choose monthly auto-debit from your bank account or you can choose quarterly or annual instalment options for the instalment payments. But, you will have to pay the first deposit in cash. 

  3. Can I enrol under the without providing proof of my age and income?

    You will have to provide an Aadhaar Card, and self-attested certificates for your age and income verification. Other than this, there is no need for any other document submission as age or address proof. However, make sure you submit a valid Aadhaar card and other details, as false information may lead to rejection of the application.

  4. What is a Pension Account Number?

    Every farmer under the PMKMY is assigned a unique Kisan Pension Account Number upon joining the scheme. It is unique to every farmer in the PMKMY scheme and is used as a reference for all future transactions. 

  5. How can I check my PMKMY account status?

    To get all the information about your account, you can log in to You can also visit your nearest CSC to know the updates on your account.


This article is issued in the general public interest and is for educational purposes only. The blogs should not be used as a substitute for competent expert advice from a licensed professional to best suit your needs. Insurance is a subject matter of solicitation. For more details on policy terms, conditions, exclusions, limitations, please refer/read policy brochure before concluding sale.