What is the purpose of a Disability Income Benefit?

• A. Pay for medical treatments
• B. Fund investment growth
• C. Refund premiums
• D. Provide money for living expenses

Answer: (D)

Disability income benefits are designed to replace part of your earnings when you’re unable to work due to illness or injury. The idea is to provide money for your everyday living expenses—things like rent or mortgage, utilities, groceries, and other bills—so you can maintain financial stability while you’re out of work. The benefit amount usually equals a percentage of your pre-disability income and continues for a set benefit period after a waiting or elimination period. It’s not meant for paying medical bills (that’s what health insurance covers), not for growing investments, and not for refunding premiums. For example, if you previously earned $4,000 a month and the policy pays 60% of earnings, you’d receive about $2,400 a month during disability, within policy limits.