What type of policy can provide income until retirement if someone is long-term ill or disabled?

Income protection insurance is designed specifically to provide a portion of an individual's income if they become unable to work due to long-term illness or disability. This type of policy ensures that individuals can maintain their financial stability by receiving regular payments, typically until they can return to work or until they reach retirement age.

Unlike health cash plans, which reimburse policyholders for day-to-day healthcare expenses, or critical illness insurance, which pays a lump sum upon the diagnosis of specified conditions, income protection offers ongoing support in the form of monthly payments that replace lost earnings. It serves as a safety net for those who are unable to earn due to health issues, ensuring they can cover essential living expenses. Life insurance, on the other hand, pays out a sum to beneficiaries upon the death of the insured, which does not directly address the need for income replacement due to a long-term disability or illness.