A critical illness insurance policy covers a specific list of life-threatening illnesses and conditions. The policy pays out a lump sum benefit if you are diagnosed with a critical illness covered by the policy. The benefit can be used to help pay for medical bills, make up for lost income, or cover other expenses.
Critical illnesses typically covered by a policy include cancer, heart attack, stroke, and kidney failure. Some policies also cover lesser known but potentially devastating illnesses such as Alzheimer's disease, Lou Gehrig's disease, and cerebral palsy.