Disability Income✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
An individual pays the premiums for their own disability income policy with personal, after-tax dollars. The premiums are generally:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Premiums paid by an individual for their own disability income policy with personal, after-tax funds are generally not deductible as an income tax expense. Disability income premiums are a personal expense, and the Internal Revenue Code does not allow an above-the-line deduction for them. This after-tax funding is the reason the benefits, when received, are generally tax-free; the tax advantage is realized at benefit time rather than at premium time. The deduction treatment differs for employers, who deduct group disability premiums as a business expense.
Why the other options are wrong
- B) There is no general full deduction for individual disability premiums; the typical treatment is nondeductibility.
- C) No age-based rule makes individual disability premiums deductible.
- D) Paying premiums after tax does not make the benefits taxable; it preserves the tax-free character of the benefit.
Memory hook
Pay your own DI premium with after-tax money: no deduction now, but the checks come in tax-free.