Life insurance can provide financial support when income stops due to which of the following?

Prepare for the IIAP Ordinary Life (OL) Exam. Test your knowledge with flashcards and multiple choice questions, each with hints and explanations. Excel in your exam with confidence!

Life insurance is designed primarily to provide financial support to beneficiaries in the event of the policyholder's death. In this context, when the insured individual passes away, their income stream ceases, and life insurance serves to replace that lost income for dependents or beneficiaries, ensuring they have financial resources to manage expenses after the loss.

In the context of disability, while life insurance itself is not typically meant to cover disability income loss, some life insurance policies may include features or riders that provide benefits if the insured becomes disabled. However, traditional disability insurance, separate from life insurance, is specifically crafted to cover the loss of income due to a temporary or permanent inability to work.

Regarding job loss, life insurance does not cover this scenario directly. The primary purpose of life insurance is not to provide income replacement in situations where the insured is still alive but may have lost their job.

Thus, while life insurance primarily addresses financial support for death, the inclusion of disability considerations and the general notion of “income stops” in the context of life insurance policies allows for the conclusion that it can encompass various aspects of income loss—hence the answer suggests 'All of the above.' However, it's important to note that traditional disability coverage is not a function of life insurance.

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