What is the primary intention of disability insurance?

Disability insurance is specifically designed to provide financial protection by replacing lost income when an individual is unable to work due to a disability. This type of insurance is crucial for individuals who rely on their income to support themselves and their families. In the event of an injury or illness that prevents them from performing their job duties, disability insurance helps them maintain their financial stability by offering a portion of their income for a specified period.

The focus of disability insurance is not on expenses related to life insurance, hospital stays, or ongoing medical costs. Instead, it serves the essential purpose of safeguarding one's earning capacity, which is vital for meeting everyday financial obligations such as rent, mortgage, utilities, and other living expenses during a time of diminished income due to disability. This makes it an important component of a comprehensive financial plan, particularly for individuals whose financial well-being is heavily tied to their ability to work.