Critical Illness Insurance

Definition - What does Critical Illness Insurance mean?

Critical Illness insurance is type of medical insurance that provides the insured with a lump sum payment in the event they are diagnosed with a specified condition or illness listed in the policy. Alternative payout structures are available, and many policies require the insured to survive the diagnosis for a certain number of days.

It may also be known as dread disease insurance or catastrophic illness insurance.

Insuranceopedia explains Critical Illness Insurance

As medical expenses are responsible for many bankruptcies, critical illness insurance may be a beneficial supplement to a regular health insurance policy. It helps prevent major financial strain on the patient and their family and facilitates paying for the desired treatment. Most policies cover the three primary critical illnesses affecting Americans: cancer, stroke and heart attack. Coverage may also be available for various other conditions, such as kidney failure, paralysis, blindness, multiple sclerosis, and more. Claim payouts can range anywhere from $10,000 to $1 million.

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