PSI Life Exam Practice Test 2025 - Free Life Insurance Exam Questions and Study Guide

The correct answer is that disability life insurance is not a type of life insurance policy. Life insurance policies are primarily designed to provide a death benefit to beneficiaries upon the death of the insured and are typically categorized into two broad types: temporary (or term) and permanent.

Permanent life insurance policies, such as whole life insurance, provide coverage for the lifetime of the insured and often include a cash value component. Term life insurance, on the other hand, provides coverage for a specific period (or term) and pays a benefit only if the insured dies during that term.

Disability insurance, while important, is distinct from life insurance. It is designed to replace income lost due to a disability that prevents someone from working, rather than providing a death benefit. Thus, it does not fit within the definition of life insurance policies, which focus on mortality risk rather than disability risk.