Which statement is true regarding disability insurance?

Disability insurance is designed to replace a portion of a person's income when they are unable to work due to a qualifying disability. One important aspect of many disability insurance policies is the waiver of premium feature. This feature allows policyholders to stop paying premiums for their insurance while they are receiving benefits due to their disability. Essentially, if an insured person becomes disabled and starts receiving benefits, they won’t have to continue paying premiums for the duration of their disability, which helps alleviate financial concerns during difficult times.

This feature is particularly valuable because it ensures that the policy remains in force, protecting the policyholder long-term without additional financial burden during a period when they may not be able to generate income. The other options do not accurately represent standard disability insurance provisions or characteristics. For instance, disability insurance typically pays benefits on a monthly basis rather than as a lump sum, it covers both disabilities resulting from accidents and illnesses, and policies do not generally expire after a set period like five years. Understanding these key attributes can help clarify the role and functions of disability insurance.