What type of insurance policy covers specific illnesses only, such as cancer or stroke?

The type of insurance policy that covers specific illnesses, such as cancer or stroke, is known as dread disease insurance. Dread disease insurance provides financial protection specifically for certain serious conditions delineated in the policy. These policies pay out a lump sum or benefits upon diagnosis of the covered illnesses, helping patients manage treatment costs, lost income, and other related expenses.

This focused coverage is distinct from other types of health insurance. For instance, major medical insurance offers comprehensive coverage for a wide range of health care services, including hospitalization and routine medical care, rather than being limited to specific diseases. Critical illness insurance can also cover specific serious conditions but typically encompasses a broader range of illnesses and may differ in structure and payout compared to dread disease insurance. Short-term medical insurance is primarily intended to cover temporary gaps in health coverage and does not focus specifically on illnesses.

Dread disease insurance, therefore, serves a unique purpose in addressing the financial burdens associated with particular serious health conditions, making it appropriate for individuals looking for targeted financial support for specific illnesses.