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: 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. This type of insurance plan might be particularly important to you, for example, if you’re self-employed or a small business owner. This coverage is beneficial in that it protects your paycheck amount, up to certain limits, and allows you to continue to pay your monthly expenses even if you are unable to work. Disability insurance premiums range significantly based on your age, gender, occupation, income, and whether you or the employer pays. Most individuals should have some form of disability insurance coverage in place during their working years. The Social Security Administration estimates that one in every four people currently age 20 will be disabled before they reach age 67.