Ace the Chartered Life Underwriter Challenge 2026 – Secure Your Success and Dominate the Exam!

Disability income insurance is specifically designed to provide financial support to policyholders who are unable to work due to a disability. This type of insurance typically pays a percentage of the individual’s normal income, helping to cover living expenses while they are unable to earn a wage.

It is particularly important because a disability can impact a person's ability to work for an extended period, leading to financial strain. Unlike life insurance, which pays out a lump sum to beneficiaries upon the policyholder's death, or health insurance, which covers medical expenses related to illnesses or injuries, disability income insurance focuses exclusively on replacing lost income due to an inability to work. Accidental death insurance, on the other hand, only pays out in the event of death resulting from an accident, offering no income replacement for individuals who are alive but disabled.

Thus, the focus of disability income insurance on income continuation makes it the appropriate choice in this scenario.