Retirement · New Sep 2026
NPS Swasthya: NPS plus health cover, explained.
A specific-purpose NPS scheme (PFRDA guidelines, 18 Sep 2026): a pension account stapled to a mandatory super top-up health policy, with 25% health withdrawals. Everything below traces to PFRDA.
NPS Swasthya does not replace NPS — it is a separate account inside NPS for people who want retirement savings and a health-insurance top-up in one enrolment at npscentral.in. The account and the insurance policy stay legally and operationally distinct: pension rules govern the corpus, insurance law governs the cover.
NPS in 60 seconds (the base layer)
Tier I is the locked retirement account (entry 18–70, exit to 85; partial withdrawals capped at 25% of own contributions with 4-year gaps before 60, 3-year after). Tier II is a liquid voluntary account with no exit load but generally no tax deduction. You pick Active (up to 75% equity, tapering with age) or Auto lifecycle, across E/C/G/A asset classes run by PFRDA-registered pension funds — returns are market-linked, never guaranteed. Tax: own contributions deduct under 80CCD(1) within the ₹1.5 lakh 80C cap plus an extra ₹50,000 under 80CCD(1B) — both old-regime only. Employer contributions deduct separately under 80CCD(2) (up to 14% of basic + DA, both regimes). At 60, up to 60% of the corpus is tax-free under section 10(12A); anything above 60% taken as lump sum and all annuity income is taxed at slab. The December 2025 PFRDA amendment lets non-government exits take up to 80% lump sum — the extra 20% is still taxable.
What Swasthya adds
Two things on top of normal NPS: (1) a standard super top-up group health policy arranged by your Pension Fund through an IRDAI-registered insurer — enrolment is not complete without it, and cover starts no later than T+1 working day after enrolment; (2) health-first liquidity — up to 25% of your Swasthya contributions can go to eligible outpatient or inpatient expenses, any number of times, with no waiting period, settled directly with the provider. The PoC history matters for expectations: the Feb 2026 ICICI Prudential PoC ran 70–100% equity to fight 11–14% healthcare inflation, but the final September 2026 guidelines invest Swasthya on the Central Government Scheme pattern — steadier, not high-octane.
The insurance choices (deductible → cover)
| Annual deductible | Family-floater cover |
|---|---|
| ₹10,000 | ₹1 lakh |
| ₹50,000 | ₹5 lakh |
| ₹1 lakh | ₹10 lakh |
| ₹3 lakh | ₹30 lakh |
Family unit: you, spouse and up to two dependent children. Parents are excluded from the standard cover. Entry 18–70, renewal to 85. First-year premium is paid upfront inside the minimum initial contribution; renewals can be funded from the corpus on your mandate.
What you pay to start and hold
Minimum first payment: that year's insurance premium (plus taxes) + ₹200 annual maintenance (plus taxes) + at least ₹1,000 into the investment account. Every payment after can be as small as ₹10. On top of standard All Citizen charges, the fund may levy up to 0.08% p.a. of the Swasthya corpus plus taxes. Moving money from an existing All Citizen NPS account into Swasthya is allowed only up to the deductible amount — you cannot dump a whole corpus in.
Practical details PFRDA doesn't spell out
Reported during the proof-of-concept phase — confirm current terms with your fund before acting: claims run through the Maven app by MediAssist, integrated with CAMS — raise the claim in-app and the bill is paid directly to the hospital, no reimbursement loop. Insurance premium is debited from your Swasthya account each time with OTP approval, never silently. Tata Pension Fund's tie-up with Aditya Birla Health was quoted at ₹2,649/year (age 18–60) and ₹3,709/year (61–65) for ₹30 lakh cover on a ₹3 lakh deductible, with smaller 5L/1L and 5L/50k tiers. Waiting periods work like normal health insurance: 30 days for general illness, one year for pre-existing conditions — declare health history at purchase. More than two chronic conditions can mean no insurance offer. Cashless works as usual: show the policy at the hospital, and the deductible portion is paid out of the Swasthya account.
PoC-era numbers the final guidelines changed
Three things reported during the proof-of-concept differ from the September 2026 guidelines in force now: (1) a ₹25,000 minimum to set up the account plus ₹1,000/year to keep it active was quoted during PoC — the final guidelines need only the first-year premium plus ₹200 AMC plus ₹1,000 into the investment account, with later contributions from ₹10; (2) PoC-era entry capped at 65 with transfers of up to 30% of Tier I for subscribers over 40 (fresh contributions only for government employees) — the final guidelines allow insurance entry at 18–70 with renewal to 85, and cap transfers from an existing All Citizen account at the deductible amount; (3) only three funds (Tata, Axis, ICICI) offered Swasthya during PoC — check npscentral.in for the current list. The core mechanics (25% health withdrawals, 100% use-and-close on oversized bills, deductible-plus-top-up structure) survive in the final rules, with the oversized-bill case formally merging any remainder into All Citizen NPS.
Should you open one?
Worth a look if you already contribute to NPS, hold (or can get) a base health policy for the deductible layer, and like the idea of one mandate funding both. Skip it if you need parents covered, want maximum equity aggression, or would rather keep insurance and pension decisions separate — a standalone super top-up plus normal NPS Tier I does the same job with fewer moving parts. Calculators on this site run on numbers you enter — nothing here is a projection we stand behind.
Questions on NPS Swasthya
Is NPS Swasthya a replacement for health insurance?
No. It bundles a super top-up family-floater policy (deductible ₹10,000–₹3 lakh, cover ₹1–30 lakh) with a pension account, but the policy has its own deductible, exclusions and waiting periods under insurance law. Keep a base health cover first; treat Swasthya as a linked pension-plus-top-up, not a standalone medical plan.
How much of my Swasthya corpus can I use for medical bills?
Partial withdrawals up to 25% of your contributions to the Swasthya account, for eligible healthcare expenses (outpatient and inpatient). No waiting period and no cap on the number of withdrawals. The amount is settled directly with the hospital or provider under the prescribed process.
What if a single hospital bill exceeds the 25% withdrawal limit?
Swasthya allows a specific premature exit: the accumulated corpus is first used towards that eligible inpatient expense, and any remainder is transferred or merged into an All Citizen NPS scheme. An insurance policy already in force continues for its remaining period under its own terms.
Do my normal NPS tax benefits apply to Swasthya contributions?
Swasthya lives inside NPS, so the NPS exit and tax framework applies at the end (60% of the corpus tax-free under section 10(12A); annuity taxable as income). Contribution deductions follow the same 80CCD(1)/80CCD(1B)/80CCD(2) rules as NPS Tier 1 — 80CCD(1B)'s extra ₹50,000 works only in the old regime, and only employer contributions get a deduction in the new regime. Confirm with a CA for your slab and regime.
Some explainers quote a ₹25,000 minimum — is that still true?
That was the proof-of-concept requirement. Under the final September 2026 guidelines, the minimum initial payment is the first-year insurance premium (plus taxes) + ₹200 annual maintenance (plus taxes) + at least ₹1,000 into the investment account — typically far below ₹25,000 — and later contributions can be as small as ₹10.
What happens if I can't pay the insurance renewal from the corpus?
The Pension Fund alerts you at least 90, 60 and 30 days before renewal where practicable. If the premium still goes unpaid past the grace period and cover lapses, the Swasthya account is closed and merged into an All Citizen NPS scheme (or converted to one if you hold no All Citizen account).
Sources
Reviewed 24 Sept 2026. Rates are notified quarterly and rules change — PFRDA, EPFO, India Post and the Department of Economic Affairs are the authority, and this hub links straight to them.
- PIB — PFRDA (Exits & Withdrawals under NPS) Amendment Regulations, 2025 (PRID 2206763, 19 Dec 2025)Non-government normal exit: up to 80% lump sum with at least 20% annuity when corpus exceeds ₹12 lakh; 100% lump sum (or SLW/SUR) when corpus is ₹8 lakh or less; graded lump sum up to ₹6 lakh with balance in SUR between ₹8–12 lakh; 15-year vesting or age 60 (whichever earlier) for All-Citizen entrants; partial-withdrawal intervals of 4 years before 60 and 3 years after, capped at 25% of own contributions; entry and exit allowed up to age 85; government sector stays at 60/40.
- PFRDA — Exits and Withdrawals under the National Pension System (Amendment) Regulations, 2025The amendment regulation text itself: exit structures, lump-sum/annuity splits, SLW and SUR definitions, vesting and partial-withdrawal rules.
- PFRDA — NPS Swasthya scheme page (Operational Guidelines, 18 Sep 2026)Swasthya structure (investment account + mandatory super top-up), entry 18–70 with renewal to 85, family unit of subscriber/spouse/two children, deductible/cover combinations, ₹200 AMC + ₹1,000 minimum investment + ₹10 subsequent, CG-pattern investment, 25% partial-withdrawal rule with no waiting period, premature-exit and merger rules, and grievance via Pension Sahayak.
- PFRDA — Introduction of NPS Swasthya as a Proof of Concept (27 Jan 2026)PoC history under the regulatory sandbox: the ICICI Prudential high-equity PoC (Feb 2026) and the second PoC iteration (Apr 2026) that preceded the September 2026 guidelines.