New York Child Abuse Identification and Reporting Practice Exam

What type of insurance can be purchased to cover the costs associated with a specific chronic illness?

1. Major Medical Insurance

2. Dread Disease Insurance

3. Term Insurance

4. Supplemental Insurance

The correct answer is: Dread Disease Insurance

Dread Disease Insurance is designed specifically to provide coverage for the costs associated with certain chronic illnesses, such as cancer, heart disease, or stroke. This type of insurance typically pays a predetermined amount upon diagnosis of a specified illness, which can help cover expenses that might not be fully paid through standard health insurance. The focus on particular diseases distinguishes Dread Disease Insurance from other types of coverage that might not provide the same targeted financial support. In contrast, Major Medical Insurance generally covers a wide range of health care costs, including hospital stays and routine doctor visits, but it may not offer the focused benefits for specific chronic conditions like Dread Disease Insurance does. Term Insurance, on the other hand, is a life insurance product that pays out a benefit upon death during the term of the policy, but does not pertain to chronic illness costs. Supplemental Insurance is designed to augment existing health policies but is not specifically tailored to cover costs associated with a specific chronic illness, making it a less precise option for this need.