Which type of insurance is designed to help replace lost income due to an injury or illness?

Disability insurance is specifically designed to provide financial support to individuals who are unable to work due to an injury or illness. This type of insurance typically replaces a portion of the insured individual's lost income, allowing them to maintain their living expenses during their recovery period. The primary goal of disability insurance is to ensure that the policyholder can continue to afford necessities such as housing, food, and medical care while they are unable to earn a paycheck.

In contrast, term life insurance provides a death benefit to beneficiaries upon the policyholder’s death, but does not offer any income replacement during the policyholder's lifetime. Whole life insurance also focuses on providing a death benefit along with a cash value component, but it similarly does not replace lost income due to a disability. Accidental death insurance provides a payout only in the event of death resulting from an accident, which does not address income replacement for injury or illness scenarios that do not result in death.