Exploring NPS Swasthya: India's First Health Pension Account

Out-of-pocket spending made up about 43.4% of India's total health expenditure in 2022-23 (National Health Accounts). For roughly every ₹100 the country spends on healthcare, about ₹43 comes straight out of someone's wallet.

That points to a bigger problem. Families often pay for medical emergencies with savings they were keeping for something else, usually long-term savings like retirement.

In September 2026, PFRDA, India's pension regulator, issued operational guidelines for NPS Swasthya, a scheme that puts a retirement savings account and a health insurance policy in one structure. The guidelines took effect immediately on 18 September 2026.

What Is NPS Swasthya?

NPS Swasthya is a dedicated health pension account. It is a special scheme within the National Pension System where you build a retirement corpus and can use part of it for eligible healthcare expenses. It comes with a mandatory super top-up health insurance policy that covers the big hospital bills.

Enrolling gives you two things:

1. A pension account, invested and managed by a pension fund.

2. A standard super top-up health insurance policy, issued by an insurer, for you and your family.

The two are legally and operationally separate, but you can't enrol in one without the other. PFRDA governs the account, while IRDAI governs the policy's premium, underwriting and claims.

What's a Super Top-Up Policy?

A super top-up is a supplementary health policy that pays once a family's total medical costs in a policy year cross a set amount, called the deductible. It adds up the whole year's bills instead of looking at claims one by one.

For example, suppose your policy has a ₹1 lakh deductible and ₹10 lakh cover, and your family's hospital bills in a year come to ₹4 lakh. You cover the first ₹1 lakh, and the policy pays the remaining ₹3 lakh.

The standard policy offers four deductible and cover pairings: ₹10,000 with ₹1 lakh, ₹50,000 with ₹5 lakh, ₹1 lakh with ₹10 lakh, and ₹3 lakh with ₹30 lakh. It covers the subscriber, spouse and up to two dependent children as one floater, with no co-payment and no disease-specific sub-limits.

This is where the pension account comes in. Money moved in from an existing NPS account is capped at the deductible amount, so the corpus is built to carry the first slice, and the insurance carries the large one.

Joining NPS Swasthya: Eligibility, Costs and Rules

Eligibility: NPS Swasthya is open to all Indians between 18 to 70 (renewable up to 85). An active NPS tier 1 account is mandatory to open a Swasthya account, for ease in fund transfer.

Contributions: Your first contribution must cover the first-year insurance premium with taxes, an annual maintenance charge of ₹200 plus taxes, and ₹1,000 invested in the account. These are the minimum charges. You can invest anything above this in multiples of ₹10 to grow your medical pension corpus. There is no maximum contribution limit.

Choosing a pension fund: All pension funds will disclose the insurer, charges, premium, investment pattern, deductible options, exclusions, waiting periods and claims process. The premiums are quoted in three age bands (18 to 40, above 40 to 60, above 60 to 70). And regulatory checks apply, such as the insurer can't be a group company of the pension fund, and the fund can't take any insurance commission or premium share.

Withdrawals: You can withdraw for eligible outpatient and inpatient expenses, up to 25% of your own contributions. There's no limit on how many times you withdraw and no waiting period between withdrawals. And the money goes straight to the hospital or healthcare provider, not to your account.

Fees: Standard NPS All Citizen Model charges apply. The pension fund can add up to 0.08% a year on the corpus, on top of the ₹200 yearly maintenance charge. All charges are disclosed before enrolment.

Exits: There are two types of exit. First is normal exit, here the maturity period and rules are the same as NPS all citizen model. Second is premature exit. If an eligible inpatient bill exceeds the 25% partial-withdrawal limit then you can take a premature exit. The corpus pays the hospital first, any balance merges into an NPS All Citizen Model scheme, and your insurance continues for its remaining term.

The Fine Print

NPS Swasthya doesn't make hospital bills smaller. It changes where the money to pay them can come from, so health cover and retirement savings are planned together instead of raided in a crisis. Before enrolling, note the following:

1. Waiting periods apply to the insurance, not the corpus. The policy has a 30-day initial wait (accidents excepted) and 12 months for pre-existing and specified diseases.

2. A health declaration decides underwriting. Enrolment ordinarily rests on a Good Health Declaration covering 15 listed conditions, and a "yes" can mean a higher premium.

3. The corpus pays renewals too. If cover lapses because the premium goes unpaid, the account closes and merges into a regular NPS account. Pension funds should alert you 90, 60 and 30 days before renewal, where practicable.

4. Renewal protections. Premiums can't rise merely because of a claim.

So Who Is NPS Swasthya For?

It suits three kinds of people: those who already hold health insurance and want a larger cushion on top, those who already invest in NPS and are tired of paying hospital bills out of pocket, and households of up to four (subscriber, spouse and two dependent children) sharing one floater.

So your next step would be checking all disclosures by pension funds, understanding how much super-top your household could realistically need to cover a bad year. Then comes where to invest, while the scheme is live from the regulator side, it’s under process for actual investment.

If you need help understanding the scheme and signing up, you can book a free call with our advisors.

Hospital bills will come either way. NPS Swasthya lets you decide how prepared you are.

Frequently Asked Questions

What is NPS Swasthya?

NPS Swasthya is a health pension account under the National Pension System, designed to provide financial support for health-related expenses post-retirement.

Who is eligible for NPS Swasthya?

Any Indian citizen between 18 and 65 years of age can open an NPS Swasthya account, provided they have an active NPS Tier 1 account.

What are the contribution limits for NPS Swasthya?

There is no specific contribution limit for NPS Swasthya, but it is advisable to align contributions with personal financial goals and retirement planning.

How does NPS Swasthya differ from regular NPS?

Unlike regular NPS, NPS Swasthya is specifically aimed at covering health-related expenses post-retirement, offering a targeted approach to healthcare financial planning.