In general, most illnesses that would prevent you from working are covered but it varies from policy to policy. For example, if you were to have a stroke, then you would receive a payment. There are certain illnesses that are not covered, even if they sound scary. Some cancers, for example, would not be eligible for payment if detected in the early stages and there is a high chance of a full recovery.
When a claim is made, they are fully investigated by the insurer, and then a decision is made. In some cases, requests for payment are denied because they had not been made aware of a pre- existing condition, or the condition just isn’t serious enough.