Which of the following is TRUE regarding a standard Critical Illness insurance policy?

Question: Which of the following is TRUE regarding a standard Critical Illness insurance policy?

Answer options:

• The benefit is paid as a monthly income. ✅ The benefit is usually paid as a one-time lump sum.
• The person must be unable to work to receive the benefit.
• The benefit is taxable as income.

Correct answer: The benefit is usually paid as a one-time lump sum.

Explanation: Critical Illness (CI) insurance is a 'living benefit' that pays a lump sum upon diagnosis of a covered illness (after a survival period), regardless of whether the person can still work. Unlike disability insurance, it is not an income replacement.