ICICI Prudential Pilots Hybrid Retirement-Health Product
ICICI Prudential has launched a new scheme combining India's National Pension System (NPS) with medical expense coverage. The NPS Swasthya Equity Plus product, piloted under the PFRDA's regulatory sandbox, allows employees to use retirement savings for healthcare costs. This signals a trend toward flexible, dual-purpose financial products for Indian employees.
The NPS Swasthya Equity Plus scheme is structured with a high-growth investment mandate to specifically counter medical inflation. Its portfolio allocates 70-100% of its corpus to equities, up to 30% to debt, and up to 10% in money market instruments. This equity-heavy strategy is designed for long-term capital appreciation while providing liquidity for healthcare. Subscribers can withdraw up to 25% of their own contributions for a range of medical expenses, including outpatient (OPD) services, diagnostics, and pharmacy purchases. There is no cap on the number of these partial withdrawals during the scheme's tenure, unlike a standard NPS account. However, the first withdrawal is only permitted after the account balance reaches at least ₹50,000. This product was developed in partnership with Apollo HealthCo Limited and KFin Technologies Limited. Withdrawals are processed for medical expenses incurred across the Apollo network, with funds disbursed directly to the healthcare provider after OTP authentication. KFintech serves as the Central Recordkeeping Agency, managing the validation and rule-based processing of transactions. For severe medical emergencies, if expenses exceed 70% of the total accumulated corpus, a 100% withdrawal or premature closure of the account is allowed. Any remaining balance after settling the medical bills is transferred back to the subscriber's common NPS account. PFRDA Chairperson Sivasubramanian Ramann emphasized that the initiative complements, rather than replaces, traditional health insurance. The scheme is currently in a pilot phase within the PFRDA's regulatory sandbox to assess its operational, technological, and regulatory feasibility before a potential full-scale rollout. During this test phase, physical services are available in Bengaluru and Hyderabad, while digital access for pharmacy and diagnostics is available nationwide through the Apollo 24|7 platform. Maintaining a regular NPS account is mandatory to enroll in the Swasthya scheme.
