Critical illness insurance provides a lump sum benefit if you fall victim to one of the illnesses covered by your policy. Most insurers cover 15 to 20 serious illnesses, including heart attack, cancer, stroke, and Parkinson's and Alzheimer's disease.

What you do with the benefit is up to you. You can use the money to help while you recover from the illness, or to fulfill a long-time dream if there is no chance of recovery.

• You can seek alternative care.
• Pay off your mortgage.
• Hire a health care worker.
• Use the income to cover expenses until you can work again.

When you apply for critical care insurance, you will be asked for a family history. A high-risk genetic history can disqualify you, or make coverage more expensive. Coverage spans a wide range, from about $10,000 to $2 million. Ask about the term of your policy – some policies cover you to age 65, some to age 75, some for the duration of your life. Many people buying this insurance are aged 35 to 55, people in the lower age group enjoying low premiums.

Some critical illness policies will refund your premiums if you die without having made a claim. Another option is Return of Premium benefit which provides for all of your premiums to be refunded at an attained age if no claim has been made.