NPS Swasthya Scheme: How Subscribers Can Use 25% Funds for Healthcare Needs
For millions of NPS subscribers, retirement savings may soon serve a dual purpose. The Pension Fund Regulatory and Development Authority (PFRDA) has introduced the second ‘Proof of Concept’ for NPS Swasthya, a new initiative that aims to allow subscribers to use a part of their pension corpus for healthcare needs.
Currently being tested on a limited scale, the scheme aims to combine retirement planning with health security, offering financial support during medical emergencies.
What is NPS Swasthya?
NPS Swasthya is designed to connect pension savings with healthcare benefits. Under this initiative, subscribers can use a portion of their NPS funds for medical expenses while continuing to build their retirement corpus.
The updated version focuses on making the process simpler and more accessible, helping people manage unexpected healthcare costs without disturbing their long-term financial plans.
Health Insurance Required to Join
Subscribers who want to avail benefits under NPS Swasthya must have health insurance coverage. The insurance premium will be paid from their pension savings, creating an additional safety net during medical emergencies.
To enrol in the scheme, an initial investment of at least ₹25,000 is required.
Up to 25% NPS Corpus Can Be Used for Treatment
Under NPS Swasthya, subscribers can withdraw up to 25% of their accumulated pension corpus for medical needs. The funds can be used for:
Full Withdrawal Facility in Serious Illness Cases
In case of major illnesses or expensive medical treatments, subscribers may be allowed to access their entire fund, subject to applicable conditions. This provision aims to reduce the financial pressure caused by critical health emergencies.
An important feature of the scheme is that approved treatment expenses will be directly transferred to the hospital. If any amount remains after clearing the medical bill, the unused money will return to the subscriber’s NPS account.
Who Can Benefit From NPS Swasthya?
Indian citizens between 18 and 85 years of age can participate in the NPS ecosystem. A health declaration will be required during enrollment.
At present, NPS Swasthya is running as a pilot project with a limited number of participants. If successful, it could be expanded for wider public access.
Institutions Supporting the Scheme
Several organisations are working together to operate NPS Swasthya. Medi Assist Healthcare Services is handling the digital platform and claim processing, while CAMS KRA manages onboarding and KYC services.
Pension fund managers, including Tata Pension Fund Management and Axis Pension Fund, are managing investments. Aditya Birla Health Insurance is providing Group Health Super Top-up coverage. Medi Assist’s healthcare network includes more than 15,500 hospitals across 1,264 cities.
Growing Need for Healthcare Protection
Rising medical costs have made healthcare planning increasingly important. With treatment expenses continuing to increase, NPS Swasthya aims to provide subscribers with an additional financial cushion.
The NPS system currently serves millions of Indians, with 9.64 crore subscribers and assets under management of around ₹16.55 lakh crore as of March 29, 2026.
By combining retirement savings with health support, NPS Swasthya could become a major step towards creating a stronger financial safety net for citizens.
Currently being tested on a limited scale, the scheme aims to combine retirement planning with health security, offering financial support during medical emergencies.
What is NPS Swasthya?
NPS Swasthya is designed to connect pension savings with healthcare benefits. Under this initiative, subscribers can use a portion of their NPS funds for medical expenses while continuing to build their retirement corpus.The updated version focuses on making the process simpler and more accessible, helping people manage unexpected healthcare costs without disturbing their long-term financial plans.
Health Insurance Required to Join
Subscribers who want to avail benefits under NPS Swasthya must have health insurance coverage. The insurance premium will be paid from their pension savings, creating an additional safety net during medical emergencies.To enrol in the scheme, an initial investment of at least ₹25,000 is required.
Up to 25% NPS Corpus Can Be Used for Treatment
Under NPS Swasthya, subscribers can withdraw up to 25% of their accumulated pension corpus for medical needs. The funds can be used for: - Doctor consultations and OPD expenses
- Medicines
- Hospitalisation costs
- In-patient treatments
- Cashless healthcare services
Full Withdrawal Facility in Serious Illness Cases
In case of major illnesses or expensive medical treatments, subscribers may be allowed to access their entire fund, subject to applicable conditions. This provision aims to reduce the financial pressure caused by critical health emergencies. An important feature of the scheme is that approved treatment expenses will be directly transferred to the hospital. If any amount remains after clearing the medical bill, the unused money will return to the subscriber’s NPS account.
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Who Can Benefit From NPS Swasthya?
Indian citizens between 18 and 85 years of age can participate in the NPS ecosystem. A health declaration will be required during enrollment. At present, NPS Swasthya is running as a pilot project with a limited number of participants. If successful, it could be expanded for wider public access.
Institutions Supporting the Scheme
Several organisations are working together to operate NPS Swasthya. Medi Assist Healthcare Services is handling the digital platform and claim processing, while CAMS KRA manages onboarding and KYC services. Pension fund managers, including Tata Pension Fund Management and Axis Pension Fund, are managing investments. Aditya Birla Health Insurance is providing Group Health Super Top-up coverage. Medi Assist’s healthcare network includes more than 15,500 hospitals across 1,264 cities.
Growing Need for Healthcare Protection
Rising medical costs have made healthcare planning increasingly important. With treatment expenses continuing to increase, NPS Swasthya aims to provide subscribers with an additional financial cushion.The NPS system currently serves millions of Indians, with 9.64 crore subscribers and assets under management of around ₹16.55 lakh crore as of March 29, 2026.
By combining retirement savings with health support, NPS Swasthya could become a major step towards creating a stronger financial safety net for citizens.
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