The scheme will be implemented by United India Insurance and New India Assurance Co Ltd.
The beneficiaries will be covered for their existing ailments and illnesses as well, officials said.
The scheme is also compulsory for serving bureaucrats and employees who will retire in next one year, between July 1, 2014 and June 30, 2015. The policy would be of one year and would be renewed for next three years.
The annual instalment of insurance premium for this policy is less compared to other policies, government officials said.