What is the purpose of disability insurance?

Disability insurance is designed specifically to provide financial support to individuals who become unable to work due to a disability caused by an illness or injury. The primary function of this type of insurance is to replace a portion of the lost income, helping to maintain one’s standard of living during a period of recovery. This safety net is crucial, as being incapacitated can lead to significant financial strain, especially if the individual is the primary earner in their household.

While retirement funding, travel during recovery, and health insurance premium payments are important aspects of personal finance, they do not align with the core objective of disability insurance, which is focused on providing income replacement during a period of incapacity to work.