Is Disability Insurance Taxable?

Nov 24, 2017

When you purchase a disability plan, there are some important disability insurance tax considerations. With an “individual” market disability plan, most of the time you would receive your benefits completely tax free. This is because you have been paying your premiums with “after tax” dollars, and most disability plans take this into account when designing their policies in order to give you tax free benefits in the event that you ever became disabled.

However, please be aware that there are a couple of scenarios that could cause your benefits to become taxable.

  1. If you are a self-employed individual and you decide to deduct your premiums as a business expense, this could result in your disability insurance benefits becoming taxable should you ever suffer a disability. I would definitely advise you to consult with a tax professional in effort to evaluate if the reduction in current income taxes is worth the long term risk.
  2. If you have group disability benefits through your employer, the benefits in these types of plans are most commonly taxed, especially if your employer pays your premiums. Occasionally, group plans offered through employers are designed in such a way that the benefits are tax free, such as if the cost of your disability premiums is added to your gross income. So, it’s important to talk with your employer so that you know well in advance whether or not your benefits will be taxable if you ever become disabled.

Hopefully this information is helpful, and as always, we’re here to help!

Disability Insurance for Physicians

Income Continuation. Asset Protection. Lifestyle Preservation.

Check Out Our Reviews

Google 5 Star Rating logo
Chris has been amazing in helping me obtain disability insurance! He is extremely knowledgeable, friendly, and trustworthy. I highly recommend him for any and all of your insurance needs!

– Dr. Satvik M., Pain Management – LA

Google 5 Star Rating logo
Made the process very easy. Would highly recommend.

– Dr. Jessica B., General Suregon – NY

Google 5 Star Rating logo
I submitted a request on his website with what I was looking for and heard back within a matter of hours, quickly followed by quotes fitting what I was looking for. I was impressed by this right off the bat!

– Dr. Ray U., Veterinarian – OH

The Disability Doc logo with black and blue text

The Disability Doc Insurance Solutions, Inc. 

Choose Your Plan!

"Select from Multiple Options"

• True Own Occupation Coverage

• Exclusive Nationwide Discounts

• Easy to Shop & Compare Benefits

Contact Us

"Support is Our #1 Priority"

 

Phone

(512) 969-9147

Email

chris@thedisabilitydoc.com