Which product pays a lump-sum on diagnoses of a defined set of illnesses (which may include cancer)?

• A. Cancer Insurance
• B. Hospital Indemnity
• C. Critical Illness Insurance
• D. Accident Insurance

Answer: (C)

Critical Illness Insurance is designed to pay a one-time lump-sum cash benefit when a covered serious illness is diagnosed. The illnesses are defined in the policy and typically include conditions like cancer, heart attack, and stroke. The lump-sum can be used for any purpose, such as paying existing medical bills, replacing lost income, or covering other expenses, giving the insured financial flexibility at a stressful time. This differs from Cancer Insurance, which pays only upon a cancer diagnosis; Hospital Indemnity, which provides daily cash for hospital stays; and Accident Insurance, which pays for injuries resulting from accidents. So the described product is Critical Illness Insurance.