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Pradhan Mantri Vaya Vandan Yojana (PMVVY)

Topics covered: Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes.

Pradhan Mantri Vaya Vandan Yojana (PMVVY)

What to study?

For Prelims: PMVVY- key features.

For Mains: Significance of PMVVY.

Context: Centre has made Aadhaar (the unique 12-digit biometric identity number) mandatory for subscribers of Pradhan Mantri Vaya Vandana Yojana (PMVVY).

In cases where scheme beneficiaries Aadhaar authentication fails due to poor biometrics- the Department of Financial Services (under Finance Ministry) through its implementing agency will make provisions to help beneficiaries get Aadhaar number.

About PMVVY:

It is a Pension Scheme exclusively for the senior citizens aged 60 years and above.

The Scheme can be purchased offline as well as online through Life Insurance Corporation (LIC) of India which has been given the sole privilege to operate this Scheme.

Key features of the scheme:

  1. Scheme provides an assured return of 8% p.a. payable monthly (equivalent to 8.30% p.a. effective) for 10 years.
  2. Pension is payable at the end of each period, during the policy term of 10 years, as per the frequency of monthly/ quarterly/ half-yearly/ yearly as chosen by the pensioner at the time of purchase.
  3. The scheme is exempted from Service Tax/ GST.
  4. On survival of the pensioner to the end of the policy term of 10 years, Purchase price along with final pension installment shall be payable.
  5. Loan upto 75% of Purchase Price shall be allowed after 3 policy years (to meet the liquidity needs). Loan interest shall be recovered from the pension installments and loan to be recovered from claim proceeds.
  6. The scheme also allows for premature exit for the treatment of any critical/ terminal illness of self or spouse. On such premature exit, 98% of the Purchase Price shall be refunded.
  7. On death of the pensioner during the policy term of 10 years, the Purchase Price shall be paid to the beneficiary.

Pradhan_Mantri_Vaya

Sources: the Hindu.