Which term refers to an insurance policy where the insurer agrees to pay a cash benefit if the insured becomes disabled?

The term that refers to an insurance policy in which the insurer agrees to pay a cash benefit if the insured becomes disabled is disability income insurance. This type of policy is designed specifically to provide financial support during a period when an individual is unable to work due to a disability. The cash benefits typically replace a portion of the insured's income, helping to cover living expenses and maintain financial stability during their time off work.

Disability income insurance functions as a crucial safety net, as it ensures that individuals can sustain their standard of living even when facing challenges that impede their ability to earn income. This contrasts with the other types of options presented. Health savings accounts are savings vehicles for medical expenses, long-term care insurance covers services for chronic conditions or disabilities typically later in life, and managed care plans focus on coordinating medical care among providers. Each of these serves different purposes within the realm of insurance and does not specifically address income replacement during periods of disability.