Essay on Pradhan mantri vaya vandana yojana (PMVVY)
Free 740 words essay on Pradhan mantri vaya vandana yojana (PMVVY) for school and college students.
Our Prime Minister, Mr. Narendra Modi, announced the launch of a new scheme for senior citizens (those aged and above 60), in which they will be guaranteed interest of eight percent for a period of ten years. On the back of this, Life Insurance Corporation announced the Pradhan Mantri Vaya Vandana Yojana under their umbrella of schemes. This means, LIC will be operating this scheme on behalf of the government. Financial planners who operate in the market were of the opinion that this new scheme will be a good avenue for senior citizens to earn more interest in times when interest rates are falling. LIC has said that this scheme will be available for a period of one year from the date of launch. The Central Government will subsidize it. This interest rate is guaranteed from the government and it is an attempt by the government to create a social security system for the senior citizens in times when many sons and daughters are leaving their parents in the lurch. A law has also been enacted which exempts children from treating their parents badly.
Read More : Essay on Pradhan Mantri Jan Dhan Yojna (PMJDY)
Key benefits of the PMVVY
The PMVVY has the following benefits:
- This scheme can be purchased both offline and online. The online purchase can be made from the website of LIC.
- Under this scheme, the pensioner will receive pension at the end of each time period chosen, during the tenure of the scheme
- The pension shall be paid to the subscriber through NEFT transfer to their bank account
- LIC has given subscribers the facility of paying the premium for this policy in monthly, quarterly, and half-yearly or yearly modes.
- If the pensioner survives the policy term of 10 years, purchase price along with final pension installment will be paid under this scheme. The amount invested by the subscriber in the scheme is called purchase price.
- On the death of the beneficiary within the ten year payment period, the pensioner shall be paid the purchase price.
- The minimum age for entry into the PMVVY scheme is 60 years (completed), while there is no maximum age limit.
- There is a minimum and maximum amount to be invested in this scheme. The PMVVY scheme requires that under the yearly pension mode, the minimum amount that has to be invested in the scheme is Rs 1,44,578 and the maximum amount is Rs 7,22,892. In the monthly pension mode, the premium amount to be paid is minimum Rs 1,50,000 and a maximum of Rs 7,50,000.
- LIC further said that the maximum pension amount is for a family as a whole, which in turn means that the total amount of pension under all the policies allowed to a family under this plan shall not exceed the maximum possible limit. The family for this purpose will comprise the pensioner, his/her spouse and dependents.
- Thus, Rs 1,000 will be the minimum pension paid to a subscriber on a monthly basis. For this, he has to invest Rs 1, 50,000 with the PMVVY scheme. The maximum monthly pension is Rs 5,000 per month for which Rs 7, 50,000 is required to be invested with the scheme.
- Simply put, for every Rs 1,000 that the person invests in the PMVVY, he gets Rs 83 per annum, in the yearly pension mode, Rs 81.30 in the half yearly pension mode, Rs 80.50 in the quarterly mode and finally Rs 80 in the monthly mode.
- This scheme allows pre-mature withdrawal under exceptional circumstances like the pensioner requiring money for treatment of any critical/terminal illness of self or spouse. The surrender value payable in the circumstances will be 98% of the original amount invested. Loan facility is available on this policy after completion of three years of premium payment. The maximum amount of loan that can be taken is 75% of the invested amount.
- The PMVVY falters in providing adequate liquidity to the subscriber as compared to the Senior Citizens Savings Scheme. The former has a longer gestation period, while the latter provides more liquidity to the subscriber.
Thus, we have seen some of the steps that the GOI are taking in order to secure the senior citizens of India. In today’s times when children are not caring for parents once they get older, these steps are welcome for all senior citizens. This gives them an iota of support from the government in the absence of support from their children. This is a truly path breaking step that the GOI has taken.