Final answer:
Dread disease policies cover diseases that are not frequent but result in high costs when they occur, such as severe illnesses like cancer or heart disease. Sporadic diseases are covered due to their potentially devastating financial impacts, while endemic diseases are more constant within populations.
Step-by-step explanation:
Dread disease policies generally cover diseases that do not occur frequently but involve significant costs when they do occur. These are typically severe illnesses like cancer, heart disease, stroke, and certain epidemics, which can devastate an individual financially due to their high treatment costs. Diseases covered by such policies are often those that don't produce persistent immunity in survivors, leading to high rates of spread, recurrence, and mortality, which in turn contribute to the economic risk individuals face.
Diseases like malaria are considered endemic to certain regions, and are constantly present, often at a low level, within a particular geographic area. In contrast, sporadic diseases, such as tetanus or plague, are seen only occasionally without geographic concentration. Epidemic diseases, on the other hand, are acute outbreaks that can result in widespread health crises. The re-emergence of certain diseases, as monitored by organizations like the WHO, also factors into the consideration of dread disease policies, given the potential for catastrophic impact.