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Critical Illness Insurance

Critical Illness Insurance

Definition

A limited form of health insurance that pays a lump sum if the named insured is diagnosed as having one of the specific life-threatening conditions defined in the policy. Critical illness insurance is sometimes combined with life insurance, where the policy pays its benefits if the insured is diagnosed with a listed critical illness or when the insured dies, whichever happens first. Most critical illness policies cover the illnesses of advanced cases of cancer, severe heart attack, and stroke that results in permanent symptoms. Comprehensive critical illness policies cover such additional illnesses as Parkinson's disease, multiple sclerosis, severe burns, bypass surgery, renal failure, Alzheimer's, angioplasty, loss of sight, permanent loss of hearing, and organ transplant. Some critical illness policies provide coverage against the loss of a limb. Most critical illness policies will not cover any claims made as a result of self-inflicted injury or alcohol or drug abuse.

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