Objective: To evaluate the implementation effects of critical illness insurance of New Cooperative Medical System (NCMS) on the occurrence rate and economic burden of major disease expenditure. Methods: Based on the peasant household data of China Family Panel Studies (CFPS) in 2014, the two-part model was applied to analyze the changes in major disease occurrence and burden after the implement of insurance. Results: NCMS critical illness insurance didn’t reduce the occurrence of major disease expenditure, but signally cut down the economic burden of serious illness peasants in central and eastern China. Conclusion: the implementation effect of NCMS critical illness insurance was good in central and eastern China, but was poor in western China; the prevention and health care system should be built in the rural areas of a high incidence of major diseases, while the implementation plans and compensation level of critical illness insurance should be improved in western China.