Critical illness (CI) insurance has become a major component of life and health protection over the past four decades. Originally conceived as “dread disease” cover for a small number of catastrophic conditions, it has evolved into a complex product class with extensive condition lists, tiered benefits, and multiple-pay designs. The insured event in CI is usually a diagnosis defined by contract wording rather than death or occupational disability. This creates distinctive challenges for insurability, underwriting, pricing, and claims adjudication. Medical advances in diagnosis, screening, and treatment continuously move the goalposts, affecting incidence, severity, and public expectations of what should be covered. This chapter traces the historical development of CI, explains the principles of insurable risk as applied to diagnosis-based products, and reviews the evolution of key disease definitions such as myocardial infarction, stroke, and cancer. It discusses individual and group underwriting, the central role of clear definitions in claims, and the emerging impact of liquid biopsy, multicancer early detection, and artificial intelligence. Actuarial and risk-management considerations, including incidence trends, lapse behavior, and reinsurance, are outlined. Finally, the chapter places CI in a public health and ethical context and considers future directions for CI product design and governance at the intersection of medicine, insurance, and society.