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: The hope is that monthly obligations can still be covered while you are on disability, helping you and your loved ones avoid financial hardship. Bottom Line
Disability insurance is an essential component of a sound financial plan for many individuals and families. Having the right coverage in place means that you can worry less about disability due to sickness or injury in the future that would keep you from earning a steady paycheck. However, it is important to understand how disability insurance premiums are paid and how benefits are received. You cannot take a tax deduction for disability insurance premiums paid each year, so there is no upfront tax benefit to you. The good news is that when you need the benefits the most, the payout received from your disability policy is not taxed as income. Before selecting the disability insurance coverage that’s the best fit for you and your family, consider the benefits received compared to the cost of the policy. Author: Melissa Horton
Melissa Horton has an MBA in Finance and has worked as a financial professional for the past 13 years, helping clients understand the often complex vehicles available for both lending and investment needs. She is passionate about financial literacy and strives to educate clients and the general public to empower them in making smart financial decisions.