NPS Health: Rising costs of healthcare and everyday essentials can put significant pressure on household finances. A sudden medical emergency can further disturb a family’s monthly budget. To address this concern alongside retirement planning, the government has introduced a facility that combines NPS savings with health insurance protection.
The Pension Fund Regulatory and Development Authority (PFRDA) has issued operational guidelines for the NPS Health scheme. The facility brings together a health fund and super top-up health insurance with retirement savings.
Here is a look at the contribution requirements, health coverage options and withdrawal facility available under the scheme.
What Is the NPS Health Scheme?
The NPS Health scheme consists of two separate components: an NPS Health investment account and a super top-up health insurance policy. While both have separate legal and operational structures, purchasing the health insurance policy is mandatory for joining the scheme.
The insurance is offered as a family floater policy covering the subscriber, spouse and up to two children. Parents are not included under this coverage.
How Much Do You Need to Invest?
At the time of opening the NPS Health account, the minimum initial contribution is ₹1,000. The subscriber must also pay the first-year insurance premium along with applicable taxes.
An annual maintenance charge of ₹200 is applicable. After the initial contribution, subsequent contributions can be made with a minimum amount of ₹10.
In addition to the ₹200 annual maintenance charge, pension funds may charge an annual fee of up to 0.08% on the NPS Health fund.
How Can You Get Health Cover of Up to ₹30 Lakh?
The super top-up health insurance component provides different combinations of sum insured and deductible amounts. The available options include ₹1 lakh coverage with a ₹10,000 deductible, ₹5 lakh coverage with a ₹50,000 deductible, ₹10 lakh coverage with a ₹1 lakh deductible and ₹30 lakh coverage with a ₹3 lakh deductible.
The policy is available to individuals between 18 and 70 years of age. Subject to the applicable rules and policy conditions, the coverage can be renewed up to the age of 85.
Withdrawal Facility for Medical Expenses
The NPS Health account also provides a withdrawal facility for eligible medical expenses. Subscribers can withdraw up to 25% of the contributions accumulated in the account for qualifying healthcare expenses.
This can include hospitalisation and eligible outpatient treatment. However, the amount is not paid directly to the subscriber; instead, it is paid to the hospital.
What Treatments Are Covered?
The health insurance component provides coverage for hospitalisation, daycare procedures, home hospitalisation and AYUSH treatments. It also covers certain specified modern medical treatments, subject to the applicable policy terms and conditions.
Disclaimer
This article is intended solely for general informational purposes. The features, charges, eligibility requirements, coverage and withdrawal rules mentioned above are subject to the applicable scheme and insurance policy terms. Readers should check the latest official guidelines and policy documents before making any financial or insurance-related decision.