New York Child Abuse Identification and Reporting Practice Exam

What is a primary purpose of disability income insurance?

1. To provide funding for medical bills

2. To replace lost income due to illness or injury

3. To cover funeral expenses

4. To pay off debts

The correct answer is: To replace lost income due to illness or injury

The primary purpose of disability income insurance is to replace lost income due to illness or injury. This type of insurance is designed to provide financial support to individuals who are unable to work because of a disability that prevents them from performing their job duties. The benefit payments from disability income insurance help cover living expenses, such as housing, food, and other everyday costs, allowing policyholders to maintain a sense of financial stability during their recovery period. Other options, while they address important financial needs, do not align with the specific purpose of disability income insurance. For instance, funding for medical bills typically falls under health insurance, which covers costs related to medical care and treatment. Similarly, covering funeral expenses is usually associated with life insurance or specific burial policies, while the aim of paying off debts generally relates to various types of loans and credit management rather than income replacement. Thus, the emphasis on income replacement sets disability income insurance apart and highlights its critical role in providing financial security in the face of unforeseen health challenges.