insurance

Specified Disease Insurance

Insurance coverage that provides benefits only for specific diseases or medical conditions named in the policy, such as cancer, heart attack, or stroke. This type of insurance pays predetermined amounts upon diagnosis or treatment of the covered conditions.

Example

“Lisa purchased specified disease insurance that would pay $50,000 if she was diagnosed with cancer, heart disease, or kidney failure.”

Memory Tip

Think 'SPECIFIC = Special Protection for Exact Conditions Insurance Focuses on' - it only covers the diseases specifically named.

Why It Matters

This insurance can provide crucial financial support for expensive treatments and lost income when facing serious illnesses, especially if your regular health insurance has high deductibles or limited coverage. However, it won't help with medical conditions not specifically listed in the policy.

Common Misconception

Many people think specified disease insurance is comprehensive health coverage, but it only pays for the exact conditions listed in the policy. You could face significant medical expenses from unlisted conditions while receiving no benefits from this type of insurance.

In Practice

David pays $45 monthly for specified disease insurance covering cancer, heart attack, and stroke. When he's diagnosed with colon cancer, the policy pays him a lump sum of $25,000 plus $500 for each chemotherapy treatment. However, when he later develops diabetes, he receives no benefits because diabetes isn't one of the specified diseases covered by his policy, even though his treatment costs $8,000 annually.

Etymology

The concept developed in the 1950s as insurers began offering targeted coverage for specific high-cost medical conditions. 'Specified' comes from Latin 'specificare,' meaning to mention explicitly.

Common Misspellings

Specifed Disease InsuranceSpecified Desease InsuranceSpecificed Disease InsuranceSpecified Disease Insurence

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