What is long-term disability insurance?

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Long-term disability insurance is an important, and often overlooked, type of insurance. When it comes to health and insurance, most people just think about health insurance. But when there's a serious health problem, there are more than just medical bills to worry about - especially if the health problem is serious enough to keep you from working. That's a blind spot for a lot of people. And that's why serious health problems are the underlying cause of most personal bankruptcies and home foreclosures in the U.S.

This is where long-term disability insurance can help. It replaces your income if a health problem keeps you from working for an extended period of time. It protects the assets you'd otherwise deplete to cover your living expenses. Think of it as the paycheck side of health insurance. A more accurate name for it (and what it's called in other countries) is income protection.