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What is a Long-Term Disability Insurance Premium?
Definition of Long-Term Disability Insurance Premium A Long-Term Disability Insurance Premium is a few dollars that an individual or the policyholder pays to purchase coverage for long-term disability benefits. This insurance premium replaces income if you are off work with a temporary illness that lasts more than four weeks.
This amount can vary based on Age, Health, Occupation, Elimination Periods, Benefit Amount and Coverage Length.
Is Long-Term Disability Insurance Premiums Tax Deductible?
If you paid for your policy with after-tax dollars, LDI premiums are NOT tax-deductible. You cannot claim a tax deduction on the premium that you have paid out of pocket for an individual’s long-term care insurance policy when reporting your federal income tax.
If you have a group disability premium plan through your employer and the premiums are pre-tax deductions, you did so. Those premiums would not be included in your income for tax purposes. The current situation is that you will get a tax benefit indirectly by decreasing your taxable income.
Can you Deduct Long-Term Disability Insurance Premiums on Taxes?
You cannot even deduct the long-term disability insurance premiums if you paid for them with after-tax dollars. This is because the premiums were bought with taxed money, so they are not considered tax-deductible expenditures.
But if you paid for the long-term disability insurance premiums with pre-tax deduction dollars (like through a group benefits plan at work), most likely, you can add the cost of the premium as a tax deduction.
Also, See: Short-Term Disability Insurance Premium
