From an insurance perspective, what is the main risk associated with disability?

• A. Loss of assets
• B. Loss of Income
• C. Medical expenses
• D. Premium increases

Answer: (B)

The main risk being addressed is the loss of income. When illness or injury prevents you from working, your earnings disappear, making it hard to cover living expenses like housing, food, and utilities. Disability insurance is designed to replace a portion of that income during the period of disability, so you can maintain your standard of living while you recover. Medical expenses fall under health insurance, not disability coverage, which is why that risk isn’t the primary focus here. Premiums are simply the cost of carrying the policy, not the risk itself. While loss of income can lead to financial strain, the purpose of disability coverage is to provide income replacement during the disability period.