Are disability insurance benefits taxable?

Question

As things stand, my income depends on my ability to work, and my employer provides some disability coverage. As things stand, I also have savings, but not enough to replace years of income if I could no longer work. The part I keep coming back to is that a recent family or job change made me realize that the policy may no longer match the reason I bought it.

Soradin · Accepted Answer

Tax treatment often depends on who paid the premium and whether the premium was paid with pretax or after tax money. As part of the policy review, disability insurance replaces part of earned income when illness or injury prevents work under the policy definition. Look to the policy language and current values when deciding what the coverage really provides, rather than assuming a sales illustration tells the whole story. Look first to the written contract and the latest illustration, then have a licensed insurance professional provide a written explanation of the relevant guarantees, exclusions, riders, and surrender restrictions.

Are disability insurance benefits taxable?

Soradin

Need help with your situation?