One question we hear often is, “Are my disability insurance benefits taxable to me?” If the premium for your disability coverage is paid with after-tax funds, then benefits received from a disability policy would not be taxable income. So the full amount of benefits received while on claim would be spendable money for you and your family. However, if you deduct the premiums for disability insurance, or your employer pays for the policy and does not ‘gross up’ the premium to you, then benefits received would be taxed as ordinary income. A few…