What is the primary purpose of a 'safety net policy'?

The primary purpose of a 'safety net policy' is to provide coverage designed to protect individuals or entities against catastrophic or severe risks. These policies are structured to offer a financial safeguard in situations that could lead to significant financial loss or hardship, helping to mitigate the impact of unexpected events that could be financially devastating.

The term 'safety net' conveys the idea of a protective measure that kicks in during dire circumstances, ensuring that the policyholder is not left completely vulnerable to extreme risks that can arise in life or business. For instance, this could include serious health issues, natural disasters, or significant liabilities that exceed normal coverage limits.

While the other options touch upon various types of insurance or policies—like academic expenses, small business coverage, or health and wellness initiatives—none align with the fundamental definition of a safety net policy, which is specifically about protection from high-impact incidents.