Life & Health Insurance Practice Exam 2025 – Your All-in-One Guide to Exam Success!

Disability Income (DI) insurance provides coverage for individuals who are unable to work due to a disability caused by both accidents and sickness. This means that if a person becomes temporarily or permanently disabled due to an injury from an accident or due to an illness, they would be eligible to receive benefits from a DI policy.

The inclusivity of DI policies to cover both types of disabilities is crucial because a significant portion of disabilities arise from medical conditions rather than accidents. This broad coverage ensures that policyholders are adequately protected against the loss of income resulting from a wide range of circumstances that could prevent them from working. Benefits are typically calculated as a percentage of the insured's income and are designed to replace lost wages, helping the individual maintain their standard of living during their period of disability.

The other options, which limit the coverage to just one category (accidents, sickness, or chronic conditions), do not align with the comprehensive nature of Disability Income insurance, which aims to cover a more extensive range of disabling scenarios. This feature makes DI a valuable financial tool for those concerned about the risks associated with both accidents and illness.