Which type of coverage provides a payout upon diagnosis of a covered illness?

• A. Critical illness coverage
• B. Term life
• C. Disability income protection
• D. Whole life

Answer: (A)

Critical illness coverage is designed to provide a lump-sum payout when you’re diagnosed with a covered illness. This benefit is triggered by the diagnosis itself, helping with medical costs, treatment choices, or income replacement while you focus on recovery.

Term life, by contrast, pays only if you die during the term, not upon illness diagnosis. Disability income protection offers ongoing income if you’re unable to work due to a disability, rather than a one-time payment after diagnosis. Whole life provides a death benefit and often cash value accumulation, with no standard payout tied specifically to an illness diagnosis.

So, the option that best matches a payout upon diagnosis of a covered illness is critical illness coverage.