What is the primary purpose of long-term disability insurance?

The primary purpose of long-term disability insurance is to provide income if the insured cannot work for an extended period due to illness, injury, or other health-related issues. This insurance is essential for individuals who may find themselves unable to earn a paycheck over an extended period, ensuring they can meet their financial obligations and maintain their standard of living.

Long-term disability insurance typically pays a percentage of the individual’s income, allowing them to manage expenses like housing, utilities, and food while they are unable to work. This coverage is designed to be a safety net for those who would face significant economic hardship if they were unable to return to their jobs for a longer duration. The benefits usually kick in after a waiting period, which varies by policy.

Other options do not align with the primary function of long-term disability insurance. For instance, covering short-term medical expenses is more relevant to health or short-term disability insurance. Replacing life insurance after death pertains to life insurance policies that provide benefits upon the policyholder's death, and funding retirement savings falls under financial planning strategies rather than disability coverage.