LIC Arogya Rakshak – should you go for it?

Share on whatsapp
Whatsapp share
Share on twitter
Tweet it out
Share on facebook
Share on FB
Share on linkedin
Post on LinkedIn

One of the many lessons that the pandemic has taught is that despite having a health cover, you can still be very badly out-of-pocket when it comes to covering hospital bills and all the ancillary expenses that come with it. Could LIC’s newly launched ‘Arogya Rakshak’ (launched in July 2021), which is a new and improved version of its ‘Jeevan Arogya Plan’ that has been withdrawn, address this? If you are thinking it’s just old wine in a new bottle, here is a closer look to see if it can find a place in your protection portfolio.

Arogya Rakshak, LIC, LIC Arogya Rakshak

The LIC Arogya Rakshak falls somewhere in between a hospital daily-cash policy and a critical illness cover. It is an individual health insurance plan from a life insurer that provides a definite benefit unlike indemnity health covers that only reimburse hospital expenses. It can be taken either on an individual or a family floater basis, with one member being the Principal Insured (PI). 

Minimum age at entry for the principal insured, spouse and parents is 18 years and the maximum is 65 with cover until age 80. For children, the age at entry has to be between 91 days and 20 years, with coverage possible only until they turn 25.

Unlike other health or critical illness policies where you choose a Sum Assured, Arogya Rakshak works based on an ‘Applicable Daily Benefit (ADB)’ amount that you choose at the start of the policy. The initial ADB you choose is called the Initial Daily Benefit or IDB. It starts at Rs. 2,500 and can go up to Rs. 10,000 in multiples of Rs.500 based on your choice (used to be only up to 4,000 under Jeevan Arogya). The ADB you choose along with other factors such as age and other underwriting guidelines, decides the premium payable. There is a rebate on premium for policies with Hospital Cash Benefit over Rs. 4,000 which may make it more attractive to opt for a higher cover. The different types of benefits you can get from the policy are a factor of the ADB chosen by you.


#1 Predetermined benefit with generous caps, higher than Jeevan Arogya

The most attractive aspect of this product is that it offers a predetermined cash benefit in case of one of the over 260 specified surgeries, irrespective of how much is actually spent. (Jeevan Arogya covered only 140 specified surgeries). Further, the hospital cash benefit provides the insured with the benefits of a hospital daily-cash plan, providing a fixed allowance for each day spent in hospital as long as the stay exceeds 24 hours.  A brief summary of the benefits based on your chosen ADB can be seen in the table below.

In an automatic protection against healthcare inflation, Arogya Rakshak offers an auto-step up benefit that incrementally adds 15% of the IDB to the ADB every three years (used to be annual increments under Jeevan Arogya) until the ADB reaches 1.5 times the IDB. It also comes with an optional term assurance rider and an accident benefit rider.

As Arogya Rakshak offers a defined benefit like a critical illness cover, it is comparable to such plans too. A critical illness cover makes only one payout in a lifetime - on the diagnosis of one of the listed critical illnesses, subject to the insured surviving a minimum time period after diagnosis. Arogya Rakshak makes multiple benefit payments as long as the policy is in force and subject to the limits set out in the table above. It does not come with a survival period requirement either.

# 2 LIC is the largest life insurer in the country and has a favourable claims settlement history.

#3 Additional sweeteners

A no claim bonus in the form of 5% of the IDB will be added to the ADB for every three claim free policy years. The policyholder also gets his / her health check-up bill reimbursed once every three years, subject to a maximum of half of the ADB.

#4 Quick cash facility

If the insured is undergoing any of the eligible surgeries in any of the listed network hospitals, the insured will have the option to avail of a cash advance amounting to 50% of the eligible surgical benefit amount which will be credited to the bank account instead of waiting until the claim is filed after the event.

#5 Auto health cover

Perhaps one of the most significant additions to Jeevan Arogya, resulting in its new avatar is the Auto Health Cover. In case of death of the original Principal Insured, the policy shall continue with a new Principal Insured (insured spouse or parent) along with other eligible surviving inured(s) without any payment of premium for a further period of 15 years or up to specified age in respect of each of the insured whichever is earlier.  (For insured children, the AHC period will be either 15 years or until they turn 25 whichever is sooner and for the spouse / parents it is 15 years or till the age of 70 whichever is sooner.


#1 Insufficient cover

Given that every benefit under Arogya Rakshak is capped at a multiple of ADB, the hospital cover can be grossly insufficient in the event of a major surgery. Several expensive procedures are now done as day care procedures. But even with the maximum IDB of Rs. 10,000, your eligibility for such procedures will only be Rs. 50,000. Another important aspect of health coverage namely, home-care especially in recent times that have seen many having to set up ‘ICU’ like facilities at home, is not covered under Arogya Rakshak. 

For similar reasons, Arogya Rakshak cannot entirely substitute a critical illness cover either. With critical illness plans, you can make them count by going in for a generous cover (For e.g. Aditya Birla Health Insurance offers a critical illness cover where the sum assured can go up to 12 times your gross income) which is not possible with Arogya Rakshak where benefits are based on ADB. While critical illness covers are based on diagnosis of one of the listed critical illnesses (HDFC Ergo lists the following in its Silver Plan: Heart Attack, Multiple Sclerosis, Stroke, Cancer, Major Organ Transplantation, Coronary Artery Bypass Surgery, Paralysis and Kidney Failure),  Arogya Rakshak is based on treatments for specified health conditions, major surgical procedures, day care procedures and hospitalisation, even though it comes with a similar waiting period and exclusion of pre-existing conditions unless accepted by the insurer. 

#2 Premium revisions

You cannot lock into premiums in this policy. Premiums are only guaranteed for 3 years at a time, after which LIC reserves the right to revise the premium. Thereafter, it will remain fixed at that level for a further period of 3 years.  Of course at the time of premium revision, the insured has the option to cancel the policy. Below is the indicative annual premium for an IDB of Rs. 5,000.

LIC Arogya Rakshak

Source: Arogya Rakshak sales brochure

Further, while Arogya Rakshak cannot be compared to an indemnity health cover or your critical illness cover or a hospital daily cash policy, depending on the IDB chosen by you, it can command a higher premium.

#3 Not portable

Being issued by LIC, it does not come under the purview of the portability norms issued by IRDAI and hence will not be portable to another insurer.

# 4 Waiting Period & Exclusions

Like other health insurance products, Arogya Rakshak comes with a general waiting period of 90 days for hospitalization or surgery due to sickness. This general waiting period is not applicable in the case of accidental injury. There is also a waiting period of 2 years for a list of specified treatments including treatment for cataract, gallstones, hernia, knee or joint replacement (other than those caused) by accident etc.

The exclusions too are not unlike other health policies (hospitalization outside India, surgeries done for the purpose of diagnosis, purely cosmetic procedures that are not medically necessary, anything arising out of attempted suicide, anything related to pregnancy and childbirth etc.) and need to be read carefully before to see how it affects one’s specific medical history before making a decision.

Our Take

The primary objective of taking health insurance is to protect your finances against health emergencies. LIC’s Arogya Rakshak may not serve this purpose due to its cap on the payouts linked to the ADB. While the benefits may seem generous, a realistic look at surgery and recovery costs based on medical and family history may tell you that your costs in case of major surgeries may not get fully covered. Though Arogya Rakshak is positioned as a supplement to your indemnity health-plan, there are better ways to achieve. We think that a super top-up plan on top of your Mediclaim policy, a generous critical illness cover and an emergency fund to take care of spillover costs will cover your bases better. Earlier articles on ‘Why you don’t need a Rs. 1 crore health policy’ and ‘Critical checks to make on critical illness covers’ offer pointers on this.

Share on whatsapp
Share via Whatsapp
Share on twitter
Tweet it out
Share on facebook
Share on FB
Share on linkedin
Post on LinkedIn

More like this

Please note that any specific queries on any of our recommendations will be answered ONLY through email. If you are a subscriber, please mail  Only general queries or discussions will be answered through the comment section of the blog. For full details, please refer to this post – How to communicate with PrimeInvestor.

8 thoughts on “LIC Arogya Rakshak – should you go for it?”

  1. Please comment LIC Arogya Rakshak benifits with existing Mediclaim policy. Can one get hospital expenses not covered in the Medicliam policy, availing LIC Arogya Rakshak

    1. Pavithra Jaivant

      Thank you for your comment Sir. Yes, because it pays fixed benefits, one can get hospital expenses not covered in a Mediclaim policy by going in for LIC’s Arogya Rakshak. However, we believe that there are better ways to supplement your mediclaim policy (through a super top up, critical illness cover or emergency fund).

  2. Most of us would be having an existing Health insurance , based on the first /second agent who met us and presented a “very good product” in those times . And staying with that product for over a decade , I am worried to change as due to entry age revising premiums . Can you give is a relative rating / checklists based on the available products, so that we know we are paying premiums to relative well balanced product ?

    1. Pavithra Jaivant

      We will be presenting a rating of health insurance plans shortly so kindly wait for that.
      Thank you.

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Register for FREE!

Gain instant access to more PrimeInvestor articles, researched products, and portfolios

The essence of PrimeInvestor

Register for FREE!

Gain instant access to more PrimeInvestor articles, researched products, and portfolios

Legal Disclaimer : PrimeInvestor Financial Research Pvt Ltd (with brand name PrimeInvestor) is an independent research entity offering research services on personal finance products to customers. We are a SEBI registered Research Analyst (Registration: INH200008653). The content and reports generated by the entity does not constitute or is not intended to constitute an offer to buy or sell, or a solicitation to an offer to buy or sell financial products, units or securities. All content and information are provided on an ‘as is’ basis by PrimeInvestor Financial Research Pvt Ltd. Information herein is believed to be reliable but PrimeInvestor Financial Research Pvt Ltd does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. The services rendered by PrimeInvestor Financial Research Pvt Ltd are on a best-effort basis. PrimeInvestor Financial Research Pvt Ltd does not assure or guarantee the user any minimum or fixed returns. PrimeInvestor Financial Research Pvt Ltd or any of its officers, directors, partners, employees, agents, subsidiaries, affiliates or business associates will not liable for any losses, cost of damage incurred consequent upon relying on investment information, research opinions or advice or any other material/information whatsoever on the web site, reports, mails or notifications issued by PrimeInvestor Financial Research Pvt Ltd or any other agency appointed/authorised by PrimeInvestor Financial Research Pvt Ltd. Use of the above-said information is at the user’s own risk. The user must make his own investment decisions based on his specific investment objective and financial position and using such independent advisors as he believes necessary. All intellectual property rights emerging from this website, blog, and investment solutions are and shall remain with PrimeInvestor Financial Research Pvt Ltd. All material made available is meant for the user’s personal use and such user shall not resell, copy, or redistribute the newsletter or any part of it, or use it for any commercial purpose. PrimeInvestor Financial Research Pvt Ltd, or any of its officers, directors, employees, or subsidiaries have not received any compensation/ benefits whether monetary or in kind, from the AMC, company, government, bank or any other product manufacturer or third party, whose products are the subject of its research or investment information. The performance data quoted represents past performance and does not guarantee future results. Investing in financial products involves risk. Investments are subject to market risk. Please read all related documents carefully. As a condition to accessing the content and website of PrimeInvestor Financial Research Pvt Ltd, you agree to our Terms and Conditions of Use, available here. This service is not directed for access or use by anyone in a country, especially the USA, Canada or the European Union countries, where such use or access is unlawful or which may subject PrimeInvestor Financial Research Pvt Ltd or its affiliates to any registration or licensing requirement.

Aditya Birla Mutual FundAxis Mutual Fund Baroda Mutual FundBNP Paribas Mutual FundBOI AXA Mutual FundsCanara Robeco Mutual FundDSP Mutual Fund Edelweiss Mutual FundEssel Mutual FundFranklin Templeton Mutual FundHDFC Mutual FundHSBC Mutual FundICICI Mutual FundIDBI Mutual FundIDFC Mutual FundIIFL Mutual FundIndiabulls Mutual FundInvesco Mutual FundITI Mutual FundKotak Mahindra Mutual FundL&T Mutual FundLIC Mutual FundMahindra Mutual FundMirae Asset Mutual FundMotilal Oswal Mutual FundNippon India Mutual FundPGIM Mutual FundPPFAS Mutual FundPrincipal Mutual FundQuant Mutual FundQuantum Mutual FundSahara Mutual FundSBI Mutual FundShriram Mutual FundSundaram Mutual FundTata Mutual FundsTaurus Mutual FundsUnion Mutual FundsUTI Mutual FundsYes Mutual Funds

Equity: Large Cap Funds | Mip Cap Funds | Large And Mid Cap Funds | Small Cap Mutual Funds | Contra Mutual Funds | Dividend Yield | Focused Mutual Funds | Find Top Index Funds | Best Sector Funds | Thematic Mutual Fund | Best Value Mutual Funds | Equity Linked Savings Scheme | Tax Saving Funds
Debt: Banking And PSU Funds | Corporate Bond Funds | Credit Risk Funds Mutual Funds | Dynamic Bond Funds | Floating Rate Funds | Gilt Mutual Funds India | Find Top Liquid Funds In India | Long term debt funds | Low Duration Funds Debt Funds | Medium Duration Debt Funds | Medium To Long Duration Funds | Money Market Debt Funds | Overnight Debt Funds | Short Duration Debt Funds | Ultra Short Term Debt Fund
Hybrid: Aggressive Hybrid Funds | Arbitrage Mutual Funds | Balanced Advantage Mutual Funds | Conservative Hybrid Funds | Dynamic Asset Allocation | Equity Saving Funds | Multi Asset Funds | Multi Asset Allocation

Mutual fund rolling returns by category: Balanced Advantage | Conservative Hybrid Fund | Corporate Bond | Dividend Yield | Dynamic Bond | Equity Linked Savings Scheme | Floating Rate | Index Funds | Large and Midcap fund | Large Cap Fund | Liquid funds | Low Duration | Mid Cap Fund | Multi Cap Fund | Short Duration | Small cap Fund | Solution Oriented – Childrens Fund | Ultra Short Duration

Login to your account