What type of insurance provides a lump-sum payment for specified critical illnesses?

Critical illness insurance is designed to provide financial support in the event that the policyholder is diagnosed with one or more specified critical illnesses, such as cancer, heart attack, or stroke. Upon diagnosis, the insurance pays out a lump-sum benefit that can be used for various expenses, such as medical bills, living expenses, or any other needs the individual might have during recovery. This type of insurance is particularly valuable because it offers immediate cash flow to help alleviate some of the financial burdens that come with serious health issues.

In contrast, accidental death insurance pays a benefit only upon the death of the insured due to an accident, which does not cover illnesses. Disability insurance provides income replacement if the policyholder is unable to work due to a disabling condition, but it does not provide a lump sum for medical expenses related to a critical illness. Whole life insurance, on the other hand, is a type of permanent life insurance that pays a death benefit upon the insured's death, along with a cash value component that accumulates over time, but it does not specifically address the concerns associated with critical illness.