A BufferedImage extends Image which means that you can declare a BufferedImage like so:
Image myImage = ImageIO.read(new URL("my/url"));
This starts getting into polymorphism and inheritance. Your object may be a BufferedImage, but a BufferedImage is still an Image and it can be used as one.
A more recognizable example perhaps would be instantiating an ArrayList as a List
List<MyType> aList = new ArrayList<>();
This allows this ArrayList to be compatible with all types of List objects, just like the BufferedImage.
Take a look at the API page for Image.
It lists all known subclasses of this abstract class, BufferedImage included. (There's only 2.)