Benefits and challenges military personnel and their families face

Working for the armed forces offers several financial benefits such as defined pension and health insurance, but there are a few challenges as well. We take a look at some of these.


Defined pension: Working in the armed forces is a government job and you will get an assured pension. It needs to be noted here that since 2004, all government jobs, except defence services, have been moved to a contributory pension system. Military personnel continue to get a defined pension for lifetime after serving for a minimum number of years. Those below the officer rank need to serve for 15 years to be eligible for pension; for officers, the service period needs to be at least 20 years.

The pension amount at retirement is usually calculated as 50% of the last drawn salary.

The pension continues for the spouse and dependants even after the death of the pensioner, subject to age and income conditions. The pension in such cases is capped at 30% of the last drawn salary. Health insurance: Healthcare facilities, including hospitalization for serious ailments, is provided for serving personnel and their dependants. For places where the facilities do not have specialist healthcare services, healthcare expenditure done elsewhere is reimbursed by the government.

For retired personnel of the armed forces, there is an ex-servicemen contributory health scheme (ECHS). Retiring personnel need to pay a lump sum to join the scheme. The lump sum amount is ₹1.2 lakh for officers, ₹67,000 for junior commissioned officers (JCOs) and ₹30,000 for jawans. The scheme is available for all ex-servicemen, including those from the Army, Navy, Air Force and Indian Coast Guard, among others. The scheme also covers ex-servicemen’s dependants, including spouse, parents and children, subject to some income, age and marital status conditions. However, children having a permanent disability who cannot earn a living are covered, irrespective of age. Minor siblings of the ex-servicemen are also covered up to 18 years of age.

These facilities can be availed at all the hospitals owned by the armed forces as well as empanelled hospitals across the country. Also, there is no upper limit to the benefit.

Army canteens: The ministry of defence has a Canteen Stores Department that ties up with manufacturers and provides goods at a discounted price to armed forces personnel. While the discounts have reduced over the past few years with the introduction of taxes on these stores and increase in online discounts, some big-ticket purchases can still be bought at a discount from these stores. For instance, you can get a mid-range sports utility vehicle at a 10% discount to the actual market price.


Many serving personnel find it difficult to get an official family accommodation in metros like Delhi, Mumbai or Hyderabad. Similarly, changing schools midterm due to transfers is a major challenge that the armed forces personnel face.

Another challenge could be in getting a life insurance policy if the person is posted in a troubled area. Contrary to popular belief, armed forces are, typically, considered a good risk from an insurance standpoint given that they need to keep fit and insurance companies don’t load premiums when issuing a policy to them. However, there could be exceptions. Financial planners we spoke to said that some of their clients who are in the armed forces faced difficulties in getting a life insurance policy when they were posted in troubled areas. It is, therefore, advisable to buy life insurance as soon as you realise you have financial dependants.