Critical illness insurance provides coverage for expenses that your health plan doesn’t cover. The purpose of critical illness insurance is to provide a monetary safety net in the event of a medical diagnosis that could result in expensive treatments or other financial hardships. Critical illness insurance kicks in after you’ve been diagnosed with a critical illness that the policy covers, such as cancer. You’ll typically get a lump sum, such as $25,000 or $50,000, when you’re diagnosed with a critical illness.

You can use the money for any reason. That may include:

• Helping pay for living expenses such as housing, food, transportation or utilities.
• Paying your health insurance deductibles, co-insurance,  or copayments.
• Paying for childcare.
• Paying for lost income.