What does long-term disability insurance provide?

Long-term disability insurance is designed to provide income replacement to individuals who are unable to work due to a long-term illness or disability. This type of insurance helps mitigate financial hardship by ensuring that policyholders receive a portion of their salary for an extended period, which can be critical in maintaining their standard of living when they cannot earn income due to a medical condition.

The benefits of long-term disability insurance typically start after a waiting period following the onset of the disability and can last for a designated period, such as until the individual can return to work, reaches retirement age, or as outlined in the policy terms. This support is essential for individuals facing severe health challenges, as it helps cover everyday expenses such as housing, food, and medical care while they focus on recovery.

The other options presented focus on different benefits that do not align with the primary purpose of long-term disability insurance. A one-time financial bonus pertains to hiring incentives, coverage for short-term medical expenses relates to short-term disability or health insurance, and an annuity for retirement benefits refers to products meant for income during retirement rather than income replacement during periods of disability.