What is the primary purpose of disability insurance?

The primary purpose of disability insurance is to supplement lost income during an illness or injury. This type of insurance provides financial support to individuals who are unable to work due to a disabling condition, ensuring they can maintain their standard of living and meet ongoing financial obligations. It is crucial for both short-term and long-term disabilities, as it replaces a portion of an individual's income, allowing them to focus on recovery without the added stress of financial hardship.

While life coverage is important for providing financial protection to beneficiaries after the death of the insured, and covering medical expenses is vital for managing health-related costs, these are not the core function of disability insurance. Furthermore, estate planning typically involves strategies for managing an individual's assets and liabilities in the event of their death, which is not related to the purpose of disability insurance. Thus, the focus of disability insurance is distinctly on income replacement for those unable to work due to health issues.