Title: Is Disability Insurance Tax Deductible? | LendEDU
Headings: Is Disability Insurance Tax Deductible?
Is Disability Insurance Tax Deductible?
Melissa Horton
What is Disability Insurance?
What Part of Disability Insurance is Subject to Taxation?
What Part of Disability Insurance is Not Subject to Taxation?
Bottom Line

Content: However, many people overlook their earning ability as an asset, and because of this oversight, fail to recognize that it can be protected with the help of insurance. Through insurance, you have the ability to transfer your risk of financial loss away from yourself and into the hands of an insurance company. In exchange for paying a premium, an insurance provider may pay for certain events that result in damage or loss. When it comes to your earning ability, disability insurance can make a significant, positive difference in your financial picture. However, it is important to know how this type of insurance impacts your taxes, both from an insurance premium perspective and a benefits perspective. In general, disability insurance is not tax deductible and therefore does not reduce your total taxable income when premiums are paid. However, disability insurance does have some tax benefits. What is Disability Insurance? In the simplest terms, disability insurance pays a portion of your salary or income if you are unable to work due to sickness or injury. Disability insurance is offered either as an employee benefit from a company or as a private, individual disability insurance policy.