Critical Illness Insurance bridges the gap between a life insurance and disability insurance, and provides immediate and substantial coverage over general health insurance.

Critical illness insurance provides a lump sum payment of immediate funds when the insured experiences a critical illness and survives. Serious, life-threatening illness such as a stroke, heart attack, cancer, etc is defined as critical illness. Such illness may not disable you but your lifestyle may be affected permanently.

How does critical illness insurance bridge the gap between life insurance and disability insurance? Life insurance pays out when you die or upon diagnosis of a terminal disease. Disability insurance pays out over time when you suffer an illness or an injury that prevents you from returning to work. With disability insurance, you need to be continuously employed, and it only covers a percentage of your income.

Most people rely on their employer's health insurance to cover illnesses. However, most insurance policies have the maximum amount of coverage, and are typically designed to cover for the average individual's needs. If you are unfortunate enough to be stricken with a critical illness, such health insurance may not provide you with the sufficient coverage. In addition, in many incidences of critical illness, a huge upfront expense is incurred at the onset of the illness. Critical illness insurance provides this immediate and substantial relief.

When seeking a critical illness insurance policy, make sure you understand the policy's definitions of critical illness and what qualifies you for coverage. Also make sure that the payout period is short upon diagnosis of the illness, and that the pay out is paid in a lump sum.