What is the name of the insurance coverage that pays a lump sum upon diagnosis of a covered critical illness?

The insurance coverage that pays a lump sum after diagnosis of a covered critical illness is critical illness insurance.

Unlike ordinary medical insurance, which typically reimburses or pays providers for healthcare services, critical illness insurance usually pays cash directly to the policyholder. The money can be used for medical expenses, travel, household bills, lost income or other needs. Payment depends on the illness meeting the policy’s precise definition.

The product was pioneered by South African cardiothoracic surgeon Dr Marius Barnard. The first critical illness policy launched in South Africa on 6 October 1983 under the name dread disease insurance. Its original coverage included cancer, stroke, heart attack and coronary bypass surgery.

Policies differ widely. A contract may require diagnosis by a specialist, specific test results or survival for a minimum period after diagnosis; 14 days has commonly been used in some markets. Accident insurance covers accidental injuries, disability insurance replaces some income after disabling illness or injury, and long-term care insurance generally pays for qualifying care needs. None is the standard name for this diagnosis-triggered lump-sum product.