Life Insurance Corporation of India, or LIC, introduced a benefit-based health insurance policy, Arogya Rakshak, on 19 July. The policy is a non-linked, non-participating, regular premium, individual health insurance.
According to the LIC, “The Arogya Rakshak policy provides fixed benefit health insurance cover against certain specified health risks and provides timely support in the case of medical emergencies and helps the insured and his/her family to remain financially independent in difficult times.”
The Arogya Rakshak policy is different from regular comprehensive health insurance in terms of its method of reimbursement. Generally, comprehensive health policies reimburse the actual cost incurred on medical treatment, up to the limit of the sum insured. On the other hand, the Arogya Rakshak policy pays lump sum benefit equal to the sum insured, irrespective of actual medical treatment costs.
In this policy, individuals can insure themselves (as the principal insured), their spouses, all children and parents under one policy. The policy is available for the principal insured, spouse or parents aged between 18 and 65 years, and children of age 91 days to 20 years. The cover period available for the principal insured, spouse or parents is up to 80 years, while the same is available for children up to 25 years only.
The policy comes with several benefits. Some of these are: flexible benefit limit to choose from; flexible premium payment options; valuable financial protection in the case of hospitalization, surgery, and such other requirements; lump sum benefit irrespective of actual medical costs; and increasing health cover by way of auto step-up benefit, and no-claim benefit.
“LIC Arogya Rakshak is an effective plan. But in terms of health, general comprehensive health insurance plans are more suitable for people, as they offer essential benefits such as cashless claim, and one year plan duration. Arogya Rakshak is quite similar to a critical illness plan that considers specific diseases. Also, this is a long-term plan that in a way takes away the hassle of renewal. But it leaves a policyholder no option to port to another insurer if he/she is looking for extended benefits,” said Naval Goel, founder and chief executive officer of PolicyX.com.
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