A dread disease policy is classified as which type of insurance?

A dread disease policy is classified as a limited health insurance policy because it specifically provides coverage for certain listed diseases or conditions, rather than offering comprehensive health protection. This type of policy is designed to pay benefits for the treatment of specific serious illnesses, such as cancer, heart disease, or other critical conditions, as defined in the policy.

Because the coverage is not comprehensive and is restricted to certain illnesses, it fits the definition of a limited health insurance policy. Unlike comprehensive health insurance, which covers a wide range of medical services and conditions, a dread disease policy focuses only on specified diseases, which is why it is vital for individuals to understand the limitations and targeted nature of such policies when considering their health insurance options.