Although first started as cancer insurance, critical insurance plans expanded to cover many other conditions. The plan is not a medical insurance and sometimes the conditions that it covers are already covered by a policy holder health or major medical plan. The critical insurance plan is best held as supplement to a health plan or a life policy. Critical illness insurance provides a payment (usually in a lump sum) if you experience a critical illness that is covered under the policy contract. Covered illnesses are determined by each carrier for their own plans.