How are premiums for an individually-owned disability income policy treated for tax purposes?

In the case of individually-owned disability income policies, premiums are not tax-deductible at all. This means that when a policyholder pays for their own disability insurance, they cannot claim those premium payments as a deduction on their income tax return.

The rationale behind this treatment is that since the benefits received from these policies are typically not taxed when they are paid out, it would not be appropriate to allow a deduction for the premiums. In essence, the tax system encourages individuals to prepare for potential loss of income due to disability, but it does not provide a tax advantage for the expense of purchasing such coverage.

In contrast, business-owned disability policies or those where the employer pays the premiums may have different tax implications. However, this question specifically pertains to individually-owned policies, reinforcing that individuals are responsible for the entire premium without the benefit of a tax deduction.