NPS Swasthya health cover explained: Premium, withdrawal and exit rules | Personal Finance
NPS Swasthya combines two things that are usually kept separate – an investment account under the National Pension System (NPS) and a health insurance policy.
But it is important to understand how the two parts work, because the scheme comes with its own contribution, withdrawal, insurance and exit rules.
The Pension Fund Regulatory and Development Authority (PFRDA) has set out the framework for NPS Swasthya in its 2026 operational guidelines.
The scheme is designed around a mandatory super top-up health insurance policy, with the NPS account providing a corpus that can also be accessed for eligible healthcare expenses, subject to specified conditions.
Here is how the scheme works.
What is NPS Swasthya?
NPS Swasthya is a specialised NPS scheme that combines a dedicated investment account with health insurance.
The insurance is a family floater. It covers the subscriber, spouse and up to two dependent children. Parents are not included in the standard coverage.
The entry age for the subscriber is 18 to 70 years. The policy can be renewed up to age 85, subject to the applicable premium, policy conditions and law.
The health insurance operates as a super top-up policy, which means the annual aggregate deductible has to be crossed before the insurance cover becomes applicable.
The available combinations are:
| Annual aggregate deductible | Sum insured |
| Rs 10,000 | Rs 1 lakh |
| Rs 50,000 | Rs 5 lakh |
| Rs 1 lakh | Rs 10 lakh |
| Rs 3 lakh | Rs 30 lakh |
The deductible is calculated on the cumulative eligible medical expenses of all covered family members during the policy year, rather than separately for every claim.
How much does NPS Swasthya cost?
There is no single fixed entry amount because the initial contribution depends partly on the insurance premium.
To open an NPS Swasthya account, the subscriber has to pay:
• The first-year insurance premium, including applicable taxes
• Rs 200 plus taxes as the annual maintenance charge payable to the Health Benefit Administrator
• At least Rs 1,000 towards investment in the NPS Swasthya account
After the initial contribution, subsequent contributions can be as low as Rs 10.
The insurance premium will depend on the subscriber’s age at entry. PFRDA has specified three age groups — 18-40 years, above 40 to 60 years and above 60 to 70 years. The actual premium will be determined by the insurer under the applicable insurance framework.
How much can you withdraw for medical expenses?
One of the key features of NPS Swasthya is the facility to make partial withdrawals for eligible healthcare expenses.
A subscriber can withdraw up to 25 per cent of their own contributions to the NPS Swasthya account. The facility can be used for eligible outpatient and inpatient healthcare expenses.
There is no specified limit on the number of partial withdrawals. There is also no minimum waiting period before making the first withdrawal or subsequent withdrawals.
However, the money is not simply transferred to the subscriber.
The amount is settled directly with the hospital, healthcare provider or other eligible entity against the healthcare expense.
This distinction is important because the withdrawal facility is intended specifically to meet eligible medical expenses.
Can existing NPS savings be transferred?
Yes, but only within specified limits.
A subscriber can transfer money from an existing NPS account under the All Citizen Model to the NPS Swasthya account.
However, the transfer is restricted to the amount required to meet the applicable deductible under the health insurance policy.
This means the existing NPS corpus cannot simply be moved in full to the Swasthya account.
Subscribers can also switch from one NPS Swasthya scheme to another when the insurance policy is renewed. Such a switch may involve a change in the Pension Fund and the associated insurance policy.
What happens if medical expenses are very high?
The guidelines also provide for premature exit in certain circumstances.
If an eligible inpatient healthcare expense in a single instance is higher than the amount that can be withdrawn under the 25 per cent partial-withdrawal limit, the subscriber can opt for premature exit.
In such a case, the accumulated NPS Swasthya corpus is first used towards the eligible healthcare expense.
If money remains after the expense is met, the balance is moved into an NPS scheme under the All Citizen Model. If the subscriber does not already have such an NPS account, the Swasthya account is converted into one.
The existing insurance policy continues for the remaining policy period, subject to its terms and applicable insurance rules.
What are the other charges?
The normal charges applicable to the NPS All Citizen Model also apply to NPS Swasthya.
In addition, the Pension Fund can levy a charge of up to 0.08 per cent a year of the assets under management (AUM) of the NPS Swasthya corpus, plus applicable taxes.
There is also the Rs 200 annual maintenance charge plus taxes for servicing the health insurance component.
PFRDA requires all applicable charges to be disclosed to subscribers before enrolment and whenever there is a change.
When does the NPS Swasthya account close?
The account can be closed in four broad situations:
• Normal exit
• Premature exit
• Insufficient funds to renew the insurance policy
• Death of the subscriber
Importantly, closure of the NPS Swasthya account does not affect any other NPS account held by the subscriber.
The key point for subscribers is that NPS Swasthya should not be viewed simply as an NPS account with free health insurance. It combines an investment component with a mandatory insurance policy, and the two have different rules.
Before enrolling, subscribers need to look at the insurance premium, deductible, sum insured, waiting periods, exclusions, NPS charges and withdrawal conditions together. The headline cover of up to Rs 30 lakh does not mean the entire amount is available from the first rupee of a medical claim, because the applicable deductible has to be considered.
