Critical illness insurance is a type of insurance coverage that provides financial protection to individuals in the event they are diagnosed with a serious, life-threatening illness or medical condition. This insurance policy pays out a lump sum benefit to the policyholder upon the diagnosis of a specified critical illness, which is typically defined in the policy.

The covered illnesses may vary depending on the insurance provider, but common conditions include cancer, heart attack, stroke, organ transplantation, kidney failure, major organ transplant, and certain types of surgeries. The policy will outline the specific illnesses covered and the criteria for qualifying for the benefit payment.

The lump sum payout from the critical illness insurance can be used by the policyholder for various purposes, such as covering medical expenses not covered by health insurance, replacing lost income during the treatment and recovery period, paying off debts, making necessary modifications to the home, seeking specialized treatments, or even taking a vacation for recuperation.

It’s important to note that critical illness insurance is different from health insurance. While health insurance covers medical expenses, critical illness insurance provides a lump sum benefit that can be used at the policyholder’s discretion. The payout is typically made once the policyholder survives a specified waiting period after the diagnosis of a covered critical illness.

The terms and conditions of critical illness insurance can vary between insurance providers, so it’s essential to carefully review the policy and understand the coverage, exclusions, waiting periods, and any other limitations before purchasing a policy.