NPS Swasthya – A New Scheme to Support Medical Expenses..!

Investment Guru Wednesday, February 04, 2026 0

NPS Swasthya – A New Scheme to Support Medical Expenses..!

Uma Maheswaran, Founder, www.silveroakcapital.in

With the objective of combining retirement planning with healthcare security, the Pension Fund Regulatory and Development Authority (PFRDA) has introduced a new initiative called the “NPS Swasthya Pension Scheme.”

This innovative scheme aims to provide financial support for medical expenses along with long-term retirement savings.

Key Objective of the Scheme

The primary purpose of the NPS Swasthya scheme is to integrate medical expense planning with retirement savings. It helps individuals prepare financially for unexpected medical emergencies and enables the creation of a dedicated fund specifically for healthcare needs.

Current Status of the Scheme

At present, this scheme has been launched as a pilot project. Based on its success and acceptance, it will gradually be expanded and made available to all NPS subscribers across the country. Plans are underway to implement it nationwide in the near future.

Who Can Join This Scheme?

The scheme is open to:

· Existing NPS account holders

· New individuals who wish to open an NPS account

· All Indian citizens

Participation in the scheme is completely voluntary, and subscribers can choose whether or not to opt for it.

Age Limit and Investment Rules

· Individuals who are 40 years of age or above are eligible to join the scheme.

· Subscribers can transfer up to 30% of the balance from their existing NPS account to the NPS Swasthya account.

· In addition, separate contributions can also be made exclusively for medical needs.

Minimum Investment Requirement

Once the balance in the NPS Swasthya account reaches a minimum of ₹50,000, the subscriber becomes eligible to withdraw funds for medical expenses.

Types of Medical Expenses Covered

The scheme allows withdrawals for:

· In-patient hospitalization expenses

· Out-patient treatment expenses

This makes the scheme useful for both major and routine medical requirements.

Withdrawal Rules

· Subscribers can withdraw up to 25% of their own contributions for medical purposes.

· If medical expenses exceed 70% of the total accumulated savings, the subscriber is permitted to withdraw the entire balance and exit the scheme.

Mode of Payment

Payments for medical treatment can be made directly to the hospital to ensure smooth processing. After meeting medical expenses, any remaining amount will be transferred back to the subscriber’s regular NPS account.

Special Features of the Scheme

· Retirement savings continue to grow safely

· Provides financial support during medical emergencies

· Useful even for those without separate health insurance

· A powerful tool for long-term financial planning

Conclusion

The NPS Swasthya Pension Scheme has been thoughtfully designed to offer dual benefits, steady retirement savings on one hand and financial support for unforeseen medical expenses on the other. For middle-class families, this scheme can serve as an effective and reliable financial safety net, ensuring better healthcare preparedness along with secure retirement planning.