LIC Arogya Rakshak (Plan No 906) – Health Insurance Plan – Should you buy or avoid?

LIC Arogya Rakshak (Plan No 906) – Health Insurance Plan – Should you buy or avoidLIC Arogya Rakshak Plan – Health Insurance Policy

LIC is launching its new health insurance plan, Arogya Rakshak Plan no.906 which comes with unique features. LIC’s current Jeevan Arogya health insurance plan would be discontinued now. In place this, Argoya Rakshak Policy is being launched by LIC. This is comprehensive plan and comes with several benefits and features. Should you buy LIC Arogya Rakshak Plan? This article would provide features, benefits, reasons to consider, negative factors and whether one should buy LIC Arogya Rakshak Plan or not.

Also Read: Comparison of health insurance plans for elderly parents or senior citizens

Key Features of LIC Arogya Rakshak Plan (No 906)

Here are the key features in this health insurance plan.

This LIC health insurance plan is being launched from 19th July 2021.

This is non linked, non-participating, individual and family floater health insurance plans.

Under family floater plan, principal insured (PI) would be policy holder and can include spouse, children and parents into the policy.

This is a defined benefit plan. Means, irrespective of actual hospitalization or surgery expenses, the amount would be paid based on the eligible amounts.

There are several benefits like hospital cash benefit, major surgery benefit, quick cash benefit etc. in this health insurance plan.

The initial daily benefit (IDB) is ranging between Rs 2,500 to Rs 10,000 per day.

There is grace period of 30 days for free look period and to surrender the policy.

Riders available with additional premiums.

Eligibility to take LIC Arogya Rakshak Policy

Here is the eligibility criteria to take this plan.

Minimum Age of entry: Principal Insured – 18 years; Spouse and parents – 18 years; Children – 90+ days

Maximum Age of entry: Principal Insured – 65 years; Spouse and parents – 65 years; Children – 20 years

Cover Ceasing Age: Principal Insured – 80 years; Spouse and parents – 70 years; Children – 25 years

Benefits under LIC Arogya Rakshak

This plan comes with several unique benefits.

#1 – Hospital Cash Benefit (HCB)

This benefit is payable in case of hospitalization due to accident or illness.

Minimum Initial Daily Benefit (IDB) would be Rs 2,500 and maximum would be Rs 10,000 per day.

Insured IDB of other members in the policy need to have less IDB compared to policy holder. Means if your family members are insured, their IDB would be lower than or equal to person insured IDB.

Twice the insured IDB would be payable in case of admission in ICU for a maximum period of 15 days for 1st year of the policy period. From 2nd year onwards this maximum period is increased to 45 days in a year.

Maximum benefit is available for 900 days per person per entire policy term.

#2 – Major Surgery Benefit (MSB)

This benefit is payable in case of major surgeries.

100 Times of Assured Daily Benefit (ADB) would be paid (apart from HCB).

There are 263 listed surgeries which are covered under this benefit. However, these surgeries are classified into 4 parts. Each part would be paid only fixed % of total benefit. It would be Category-I – 31 surgeries (100%), Category-II – 59 surgeries (60%), Category-III – 112 surgeries (40%) and Category-I – 62 surgeries (20%).

Premium waived for 1 year from the date of surgery.

Major surgery restoration in case of exhaust of MSB in a year provided it is not the same surgery.

#3 – Quick Cash Benefit (QCB)

This benefit is paid in case of any surgery happens which is covered in Category-1 and Category-II.

50% of eligible MSB would be paid in advance. Means this is not an additional benefit beyond MSB, but one can claim 50% in advance and balance 50% would be paid later.

Surgery should be done in LIC listed network hospitals only.

This benefit is paid as advance to insured’s bank account directly.

#4 – Auto Health Cover

If person insured dies, all future premiums would be waived of for a period of 15 years or up to 70 years of the insured individual which every is earlier. In case of children, premiums would be waived of till they attain 25 years of age.

#5 – Ambulance Benefit

Ambulance benefit of Rs 1,000 lumpsum per person would be paid in case of surgery happened from the list of diseases indicated in category-I and category-II.

#6 – No Claim Bonus (NCB)

5% of Initial Daily Benefit (IDB) would be increased for every 3 free claim free policy years.

#7 – Daycare procedures benefit

Day care procedure would be covered as part of this benefit.

This covers all surgeries listed in Category-I to Category-IV.

No need to admit in hospital to claim this benefit.

Maximum 3 times per insured member in a year can be claimed.

Maximum 30 times in a lifetime per insured member can be claimed.

#8 – Medical Management Benefit

This benefit covers diseases like Dengue, Malaria, Pneumonia, Pulmonary Tuberculosis and Virals Hepatitis A.

Lumpsum amount of 2.5 times of assured daily benefit is paid along with hospital cash benefit.

Maximum 2 times in a policy period would be paid.

Maximum 20 times in a lifetime per insured member would be paid.

Major exclusion here is that this benefit is not paid if MSB, OCB and DCB are paid for same disease.

#9 – Free Health check-ups

Health check-up benefit is paid once in 3 years with a maximum of 50% of Applicable daily benefit.

#10 – Premium Waiver Benefit

In case any of the insured family member undergoes surgery, one year premium would be waived.

#11 – Income tax benefits

Premiums paid under this plan would qualify for income tax benefits u/s 80D.

What is the waiting period in LIC Arogya Rakshak Policy?

General Waiting Period: For hospitalization or surgery, there is waiting period of 90 days from the date of taking the policy. This is not applicable if the hospitalization or surgery is due to accident.

Waiting period for specific diseases: There is waiting period of 2 years for 24 listed diseases.

Waiting period of pre-existing diseases: There is 2 years waiting periods for all pre-existing diseases apart from 31 diseases which would not be covered as part of this health insurance plan.

Check this article if you want to know –> how waiting period in health insurance works.

Plus Points in Arogya Rakshak

Here are some of the major plus points in this health insurance plan.

1) This is comprehensive health insurance plan with several unique features. One can consider for self or opt for family floater in case they want to add their spouse, children and parents.

2) This health insurance plan would provide you daily cash benefits in case of hospitalization / illness.

3) LIC is trusted brand. One can safely consider their plans in case the plan is suitable to them.

4) The health insurance premium paid under this plan is eligible for income tax benefit u/s 80D.

Negative factors in LIC Arogya Rakshak

Here are some of the reasons not to buy Arogya Rakshak health insurance Policy of LIC.

1) This is defined health insurance policy. Means, you need to incur the expenses and then claim from LIC as per the eligible amount. You need to keep funds in your account in case of hospitalization. Means this is not a typical health insurance policy what everyone would be looking.

2) The eligible amount to claim might be lower than actual expenses as there is no comparison to both.

3) We all know what can go wrong if we do not have health insurance. However, this health insurance policy has several restrictions which might create confusion to policy holders about features, what is eligible, what is excluded etc.

4) Some benefits like Medical Management Benefit is not paid if MSB, OCB and DCB are paid for same disease. Insured individuals need to go through all these exclusions for each benefit.

5) There is waiting period of 2 years for pre-existing diseases and for specific diseases. Also, there are 31 diseases which are excluded from the coverage.

As per Arogya Rakshak review by Basunivesh, he says “If I am the buyer of health insurance, I will go for pure health insurance which offers me indemnity cover than defined benefit cover. I know many LIC agents may push you to buy this product as LIC is offering a high commission to them (first year 35%, 2-10 years 6% and thereafter 5%), but look at your own requirements and how it will benefit and accordingly take a call”.

Should you buy LIC Arogya Rakshak?

Arogya Rakshak health insurance plan from LIC is a defined benefit plan. Benefits under this policy would be paid based on eligible amounts irrespective of the amount which policy insured might have incurred for hospitalization or surgeries or medicines.

This is not a typical health insurance plan that offers cashless hospitalization or reimbursements of expenses in case hospitalized due to illness.  Means this policy would not help you for emergency hospitalization without having funds with you.

You need to keep funds for hospitalization and later claim from LIC based on the eligible amount under various benefits. The eligible amount would depend on initial daily benefit (IDB) which is capped Rs 10,000 per day. If a person is hospitalized say for 10 days and incurred Rs 5 Lakhs, the maximum eligible amount one can get under this plan is only Rs 1 Lakh (Rs 10,000 maximum x 10 days) even if we apply all benefits under this plan.

LIC’s earlier plan Jeevan Arogya had limited features, but premium was high compared to other private companies’ health insurance plans. Not sure why LIC is discontinuing such plan and bringing a much-complicated health insurance plan. We need to wait to check how premiums look like in this plan.

If you are looking for health insurance plan, do not go for such complicated plan. Consider a simple health insurance plan that offers cashless benefits in case of hospitalization so that you do not need to run around for funds in case of any medical emergency.

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Suresh KP


  1. Thanks brother. Will explore, if some insurance can come up with something like this which includes all in one single insurance and make is convenient and cost effective like how it is prevalent in other countries it will be great

  2. Dear Suresh

    Any health insurance that covers all or some of below

    1. Doc visit fees
    2. Medicines for BP, Sugar, Uric Acid.(as these are incurred regularly during old age)
    3. Hospitalization, cashless with less approval time.
    4. Critical illness including ALL types of cancer, tumour, heart problems, liver, spinal cord back problems etc

    And what is premium if one such is available?

    And which one are you using for yourself and family ?

    1. Hello Nanmith, Every additional / new feature in health insurance comes with additional premiums. There are health insurance policies which reimburses doctor fees, OPD expenses for diagnostics/tests done etc. e.g. Apollo Munich Maxima covers consultation fees + OPD and CIGNA TTK Prohealth accumulate plan also covers doctor fees, pharmacy bills etc., But such policies come with high premiums to include these features compared to simple health insurance plan.

      I am covered under employer insurance + personally owns Max Bupa Health Insurance. I do not want to complicate too much. I just want health insurance which should be useful in case of hospitalization expenses or in case of any surgeries.

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