What type of insurance does Mike have if he receives a lump sum benefit for losing sight in both his eyes?

The correct answer is that Mike has Accidental Death and Dismemberment (AD&D) insurance. This type of insurance provides benefits specifically for accidents that result in certain traumatic injuries, including the loss of limbs or eyesight. In situations where an insured person loses the sight in both eyes due to an accident, the policies typically specify a predetermined benefit amount that is paid out as a lump sum.

AD&D insurance is designed to provide financial support in cases where an individual suffers severe injuries or death resulting from an accident. Unlike catastrophic or major medical coverage, which focuses on covering extensive healthcare costs or hospital stays, AD&D is more narrowly tailored to the consequences of accidental injuries.

While hospital expense and major medical insurance are crucial for covering treatment costs, they do not provide lump sum payouts for specific injuries. Therefore, in Mike's case where he receives a lump sum for losing his sight, it clearly aligns with the benefits provided under an Accidental Death and Dismemberment policy.