What does critical illness insurance provide?

Critical illness insurance is designed to provide financial support when an insured individual is diagnosed with a specific serious illness listed in the policy. Upon diagnosis, the policy pays out a lump sum that can be used for various purposes, such as covering medical costs, replacing lost income, or making necessary lifestyle adjustments due to the illness. This financial assistance is particularly important as it allows the insured to focus on recovery without the added stress of worrying about financial burdens.

The other options don't accurately describe the primary function of critical illness insurance. A monthly stipend for medical treatment would align more closely with certain types of health insurance, which cover ongoing medical expenses rather than offering a lump sum. Yearly medical check-ups generally refer to preventive care and are not a benefit of critical illness coverage. Coverage for long-term care pertains to assistance with activities of daily living, which is typically found in specific long-term care insurance policies, not critical illness insurance. Thus, the essence of critical illness insurance as a benefit upon diagnosis of specified serious illnesses confirms that the right answer is indeed the lump sum payment.