Arizona Life and Health Practice Exam

What type of insurance provides continuous income while an individual is disabled?

1. Life insurance

2. Health insurance

3. Disability income insurance

4. Long-term care insurance

The correct answer is: Disability income insurance

Disability income insurance is specifically designed to provide a continuous stream of income to individuals who are unable to work due to a disability. This type of insurance replaces a portion of the insured person's income, helping them maintain financial stability during their recovery period or while they are permanently disabled. The importance of this coverage lies in its focus on income replacement rather than mere medical expenses, which distinguishes it from health insurance that primarily covers medical treatments and hospital expenses. While life insurance provides a death benefit to beneficiaries upon the insured's death, and long-term care insurance assists with costs related to long-term care services, disability income insurance directly addresses the financial needs of an individual who cannot work due to a medical condition. This highlights its critical role in supporting financial well-being in the face of unexpected life challenges.