Disability Income✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A specified (dread) disease policy pays benefits:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A specified or dread disease policy covers only the diseases named in the contract, cancer, heart attack, stroke, and similar conditions, and pays benefits only when one of those diseases is diagnosed or treated. It is a limited-benefit product, not comprehensive health coverage: benefits are fixed by the contract and the insured is responsible for other medical costs. These policies are often sold as supplements and have been a target of consumer-protection scrutiny because consumers may overestimate the breadth of coverage.
Why the other options are wrong
- B) Coverage limited to named diseases is the defining feature; broad coverage of any illness describes major medical.
- C) Specified disease policies cover illness, not accident injuries; accident-only policies are a separate product.
- D) Comprehensive major medical pays all covered expenses after the deductible; specified disease policies pay fixed benefits for named conditions.
Memory hook
Specified disease = only the names on the list get paid. Cancer, heart, stroke, nothing else.