Which of the following describes the taxation of individual disability income insurance premiums and benefits?

When considering the taxation of individual disability income insurance, it's essential to understand the interactions between premiums and benefits in the context of tax law.

Individual disability income insurance premiums are generally not tax-deductible for the policyholder. This means that individuals who pay for such insurance using post-tax dollars do not receive any tax benefit at the time of payment.

On the other hand, benefits received from individual disability insurance are typically non-taxable. This means that when a person collects benefits due to a disability, those payments are not considered taxable income. This is particularly advantageous for policyholders since they can rely on the benefits without the concern of tax obligations diminishing their financial support during a time of need.

In summary, premiums are not tax deductible because individuals use after-tax income to pay for them, while the benefits are not taxable, allowing recipients to fully enjoy the financial support provided by the policy without tax liabilities.