What is the primary purpose of disability income insurance?

Disability income insurance is specifically designed to replace lost income when an individual becomes unable to work due to a disability. It provides financial support during the time when the policyholder is incapacitated and cannot earn their regular paycheck. This type of insurance is crucial for maintaining living standards and covering daily expenses, as it helps alleviate the financial burden that can result from a loss of income due to injury or illness.

While long-term care, medical expenses, and funding buy-sell agreements address important aspects of financial planning, they do not align with the primary purpose of disability income insurance. Long-term care typically focuses on non-medical care that assists individuals with daily living activities, rather than directly compensating for lost income. Similarly, while medical expense coverage is essential for healthcare costs associated with disabilities, it does not replace lost wages. Lastly, the funding of a partnership buy-sell agreement pertains to business continuity planning and is unrelated to the primary intent of disability income insurance, which is fundamentally centered on income replacement during periods of disability.