Critical illness insurance is a type of health insurance that provides a lump-sum payment to the policyholder if they are diagnosed with a serious illness specified in the policy, such as cancer, heart attack, stroke, or organ failure. The benefit is paid directly to the insured and can be used for any purpose, such as covering medical expenses, household bills, or lost income. This insurance offers financial support during a challenging time, helping to alleviate the financial burden associated with severe illnesses.