Which of the following is an advantage of disability insurance?

Disability insurance is designed to provide income replacement for individuals who are unable to work due to a disability. One of the key advantages of disability insurance is that the benefits received are typically tax-free, provided that the premiums were paid with after-tax dollars. This means that if you become disabled and need to rely on the benefits of your policy, you will receive the full amount of those benefits without having to worry about taxation, which can significantly help maintain your financial stability during a time when you cannot earn an income.

While the other options relate to financial products or benefits, they do not apply to disability insurance in the same way. Inheritance for beneficiaries is more relevant to life insurance, guaranteed levels of cash value are associated with whole life insurance policies, and increased interest rates on savings pertain to savings accounts or investment products rather than disability coverage. Therefore, the tax-free nature of disability insurance benefits stands out as a significant advantage.