Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a pension scheme. It is run by the Life Insurance Corporation of India (LIC) for senior citizens aged 60 years and above. The scheme was launched in 2017. It aims to provide a regular income to senior citizens after retirement.

The scheme of Pradhan Mantri Vaya Vandana Yojana is very important for the UPSC Civil Services exam under the syllabus of the General Studies (GS- 2 and 3) paper. This article on PMVVY Scheme will help you to prepare for the Prelims and the Mains stage of the UPSC IAS/IPS exam.

This article on Testbook will discuss in a detailed way about the launching date, objective, nodal ministry, and significance of the scheme. 

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What is Pradhan Mantri Vaya Vandana Yojana (PMVVY)?

In 2017, the Pradhan Mantri Vaya Vandana Yojana (PMVVY) was introduced as a successor to previous Varishtha Pension Bima Yojana schemes. Its primary goal was to provide guaranteed pensions to senior citizens aged 60 and above, safeguarding them from declining interest income in volatile market conditions. PMVVY offers a straightforward plan with a fixed pension rate of 8%. It is administered through the Life Insurance Corporation of India and is government-backed. Individuals can invest a maximum of Rs. 15 lakh in this scheme, and the interest rate is adjusted annually based on the Senior Citizen Saving Scheme (SCSS).

The scheme has a ten-year policy term, and upon completion of this period, beneficiaries receive a predetermined sum. Furthermore, participants have the flexibility to choose between monthly, quarterly, half-yearly, or annual payout options. For instance, if a subscriber opts for a monthly payout, the first payment is made a month after enrolling in the scheme. PMVVY guarantees a minimum monthly pension of Rs. 1000 and a maximum of Rs. 9,250. The scheme's returns are entirely exempt from Goods and Services Tax (GST). In the unfortunate event of a pensioner's demise during the policy term, the beneficiary will receive the entire invested amount, which is the purchase price. Subscribers also have the option to exit the scheme before the ten-year period concludes, with a refund of 98% of the Purchase Price.

Learn about MUDRA Yojna here.

Eligibility for Pradhan Mantri Vaya Vandana Yojana

Here are the eligibility criteria for Pradhan Mantri Vaya Vandana Yojana (PMVVY):

• Indian citizens aged 60 years and above but below 80 years as of the date of opening the account. The maximum age permitted under the scheme is 80 years.
• Existing policyholders of PMJJBY and PMSBY can also apply as long as they meet the age criteria of 60 to 80 years.
• There is no minimum income requirement for PMVVY.

The following persons are not eligible for PMVVY:

• Government employees are already covered under the National Pension Scheme (NPS) or any other pension scheme run by the Government.
• Persons who are already receiving a pension from any other source.
• Persons who have opted for the Atal Pension Yojana (APY).

For the UPSC examination and other competitive examinations, learn about multiple government schemes in the Testbook.

Benefits of PMVVY

Here are some of the benefits of Pradhan Mantri Vaya Vandana Yojana (PMVVY):

• PMVVY provides a regular income to senior citizens after retirement. The subscriber can be sure of a fixed income every month, even after they have retired.
• The scheme offers an interest rate of up to 7.40%, payable monthly. This is higher than traditional bank savings account interest rates.
• The minimum lock-in period for PMVVY is just one year. You can exit the scheme after one year if needed.
• PMVVY is a government-backed scheme. The investment is guaranteed by the Government of India. This gives investors the peace of mind that their money is safe, even if the market fluctuates.
• After completing 3 successful policy years, you can avail a loan against your Pradhan Mantri Vaya Vandana Yojana (PMVVY) investment. You can borrow a maximum of 75% of the purchase amount as a loan. 
• PMVVY offers certain tax benefits to subscribers. The premium paid and the pension received under the scheme are eligible for a tax deduction.
• Subscribers can choose to receive a monthly pension for a fixed period of time or for life. This gives them the flexibility to choose the option that best suits their needs.

Benefits of Pension with Assurance

Pension with Assurance is a feature of Pradhan Mantri Vaya Vandana Yojana (PMVVY). It provides a lump sum amount to the nominee in case the policyholder dies before the end of the policy term. The amount of the lump sum will be equal to the premiums paid plus interest.

Here are some of the benefits of Pension with Assurance:

• Provides financial security to the nominee in case the policyholder dies prematurely.
• The scheme guarantees a minimum monthly pension between Rs 1000 to Rs 10000, depending on the purchase price. The pension is payable throughout the lifetime of the pensioner.
• Provides peace of mind to the policyholder, knowing that their family will be taken care of in case of their death.
• It is a tax-efficient way to save for retirement.

Also, check this article on UJALA Scheme for your UPSC exam.

Pradhan Mantri Vaya Vandana Yojana: Advantages and Limitations

The advantages and limitations of the scheme are enlisted in the table given below:

Also, check this article on the One Rank, One Pension (OROP) Scheme for your UPSC exam.

Purchase Price Payment Under Pradhan Mantri Vaya Vandana Yojana

Prospective participants have the option to acquire the PMVVY scheme using a lump-sum deposit of the purchase price. They can choose from various payout frequencies, including monthly, quarterly, half-yearly, or yearly. Furthermore, when enrolling in this plan, buyers can decide whether to select the purchase price or the pension amount as per their preference.

Pradhan Mantri Vaya Vandana Yojana: Facts and Figures for UPSC

Facts and figures related to Government schemes are very important for the UPSC exam. So, some of the noteworthy facts related to the Startup India Seed Fund Scheme are given below in the following table:

Also, check this article on Pension Funds Financial for your UPSC exam.

Conclusion 

• PMVVY is a risk-free government-sponsored investment scheme for senior citizens.
• This pension scheme serves as a continuous source of income to help retired people meet their financial obligations.
• When creating such schemes for the elderly population, it is critical to ensure that coverage extends all the way to the last mile for inclusive growth.

Pradhan Mantri Vaya Vandana Yojana(PMVVY) UPSC Previous Year Mains

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