What type of insurance policy specifically covers certain illnesses such as cancer and stroke?

The type of insurance policy that specifically covers certain illnesses such as cancer and stroke is critical illness insurance. This type of policy is designed to provide a lump-sum payout upon diagnosis of specific, often severe, medical conditions defined in the policy, such as cancer, heart attack, or stroke. This financial support can help cover medical expenses, treatment costs, or everyday living expenses during recovery when the policyholder may be unable to work.

While dread disease insurance is a term that can sometimes overlap with critical illness insurance, it traditionally refers to policies that target specific diseases with limited benefits and might not provide the comprehensive coverage associated with critical illness policies. Major medical insurance is more comprehensive in nature, covering a wide variety of healthcare needs but does not focus specifically on critical illnesses. Accident insurance typically covers injuries resulting from accidents and does not pertain to illness coverage.

Therefore, critical illness insurance is the most accurate choice for covering specific illnesses like cancer and stroke, providing targeted financial support at crucial times.