What is the purpose of Disability Income Insurance?

The purpose of Disability Income Insurance is to provide specified income benefits if the insured becomes disabled and is unable to work. This type of insurance is designed to replace a portion of lost income, helping individuals maintain their financial stability during periods of disability. The benefits received can cover essential expenses such as mortgage payments, bills, and daily living costs, allowing the insured to focus on recovery without the added stress of financial concerns.

In contrast, other options serve different purposes. Covering funeral expenses is associated with life insurance policies, which are meant to provide financial support to beneficiaries after the insured's death. Long-term care services are typically addressed by separate long-term care insurance, which is designed to assist with costs related to chronic illness or disability, rather than lost income. Medical expenses during hospitalization fall under health insurance, which covers costs related to medical treatment and services, rather than compensating for lost earnings due to disability. Thus, the intent and benefits of Disability Income Insurance are distinct from other forms of insurance products.