New Jersey Life and Health State Practice Exam

Loss of income insurance provides:

1. Healthcare benefits

2. An individual the means to replace wages

3. Life insurance payouts

4. Property damage coverage

The correct answer is: An individual the means to replace wages

Loss of income insurance is specifically designed to provide individuals with financial support in the event they are unable to work due to illness, injury, or other qualifying circumstances. This type of insurance typically replaces a portion of the individual's income, ensuring that they can meet their financial obligations even when they are not able to earn a paycheck. This coverage is particularly important for those who rely heavily on their regular income to cover living expenses, as it helps to mitigate the financial impact of work loss. The purpose of this insurance is to offer a safety net, enabling individuals to focus on recovery without the overwhelming stress of potential financial instability. The other options describe different types of insurance or benefits that do not pertain to the primary function of loss of income coverage. Healthcare benefits would address medical expenses, life insurance provides financial support to beneficiaries after the policyholder's death, and property damage coverage deals with losses related to physical assets rather than income replacement.