New Jersey Life and Health State Practice Exam

Which of the following is not typically covered under a loss of income insurance policy?

1. Temporary disability

2. Long-term care costs

3. Accidental injuries

4. Loss due to unemployment

The correct answer is: Loss due to unemployment

Loss of income insurance is designed primarily to provide financial benefits in situations where an individual is unable to work due to specific circumstances, such as a disability or an accident. Typically, this type of insurance covers situations like temporary disability related to accidents or medical conditions, as well as income loss due to accidental injuries that prevent the insured from earning their usual income. Long-term care costs, while they pertain to medical and personal care services, do not usually fall under loss of income insurance policies. Instead, these services are often covered by separate long-term care insurance. The coverage of loss due to unemployment is generally not included in loss of income insurance policies because those policies are not designed to cover non-medical events or job loss stemming from economic conditions or employer layoffs. Employment-based income loss insurance typically falls under unemployment insurance, which is a different type of coverage altogether. By focusing on the specific circumstances that loss of income insurance is designed to address, we can see why loss due to unemployment does not fit within the typical coverage expected from such policies.