Primerica Life Producer Practice Test

What is the primary purpose of disability income insurance?

1. To cover medical expenses

2. To replace lost income due to disability

3. To provide funds for retirement

4. To pay off student loans

The correct answer is: To replace lost income due to disability

The primary purpose of disability income insurance is to provide financial support by replacing lost income when an individual is unable to work due to a disability. This type of insurance ensures that individuals can maintain their standard of living, pay for essential expenses, and support their families while they are unable to earn a regular income. Disability income insurance focuses specifically on income replacement during periods of illness or injury that prevent someone from working, which is a critical need for many individuals. By providing a percentage of the individual's regular income, it alleviates financial stress and helps manage monthly living expenses. Other options, such as covering medical expenses, providing retirement funds, or paying off loans, are not the primary focus of disability income insurance. While medical expenses might be indirectly related since disabilities can lead to increased healthcare costs, the core function of this insurance product is to address income loss, making it essential for financial security in the event of a workplace disability.