Which definition best describes "critical illness insurance"?

Critical illness insurance is best defined as a type of insurance that provides coverage for specific major health diagnoses. This form of insurance is designed to pay a lump sum benefit upon the diagnosis of a covered illness, which often includes serious conditions such as cancer, heart attacks, or strokes. The primary purpose of critical illness insurance is to alleviate the financial burden that can arise from such significant health events, allowing policyholders to focus on recovery rather than the economic impact of medical costs, lost income, or other related expenses.

This definition captures the essence of critical illness insurance, which is distinct from other types of policies that might cover minor health issues, pregnancy-related income, or accidents. It specifically targets severe conditions, emphasizing the importance of preparedness for major health crises. This focus on specific diagnoses sets critical illness insurance apart as a unique financial safeguard in the realm of health care coverage.