Specified Disease Policy

What Does Specified Disease Policy Mean?

A specified disease policy is a supplemental insurance plan that provides coverage for a specific set of diseases or a single type of disease, as outlined in the health insurance policy. These diseases may include but are not limited to, serious conditions that often result in significant expenses during a person’s lifetime, such as end-stage renal failure, major organ transplants, strokes, diabetes, coronary artery or vascular diseases, and cancer. Because these conditions are the same ones often covered by broader critical illness insurance, buyers sometimes compare the two to decide which fits their situation better.

Insuranceopedia Explains Specified Disease Policy

The primary benefit of a specified disease policy is that it provides targeted protection for specific diseases a policyholder may be at risk for, offering coverage at a nominal cost compared to insuring against all types of critical illnesses. Since it is not a standalone policy, it is typically available as a special endorsement or rider to an existing healthcare plan that lacks coverage for these conditions. Since this type of coverage only pays out for the named diseases, it works best as an add-on to a solid underlying plan, so it helps to know how to choose health insurance before deciding whether a specified disease rider makes sense. Generally, policyholders can claim the specified disease benefit only under the following conditions: the insured person is hospitalized, a doctor has diagnosed the critical illness, and confirmatory laboratory tests have been completed.