Critical illness insurance and disability income insurance can both help to provide money when you’re dealing with health issues. Whether you stop working temporarily or face high out-of-pocket expenses, these policies might play an important role — but they work differently. So, what’s the difference between critical illness and disability income insurance, and when might it make sense to buy these policies?

Critical illness Insurances is a specific, predefined set of medical conditions. Disability income insurance provides benefits to insureds who are disabled as a result of injury or illness and cannot perform normal work duties. There are several key differences between these two types of insurance.

Qualifying for Benefits

Critical illness insurance policies pay out if you are diagnosed with a specific condition named in your policy. Common examples include heart attack, cancer and stroke. These can vary quite a bit, and not all conditions are listed here.

With disability income insurance, you qualify for benefits if you’re unable to perform certain duties required to earn an income. The specifics vary from policy to policy, but the idea is that you receive payouts if you can’t work — whether the cause is illness, injury or other factors. A physician typically must certify that you’re unable to work.

Payment of Benefits

Critical illness insurance is often a lump sum benefit, so you receive a relatively large amount up front. That payment might arrive shortly after you receive your diagnosis.

Disability income insurance typically pays benefits to you monthly, similar to the income from work that you’re replacing. You may need to satisfy a waiting period before you receive payments (90 days, for example).