My employer offers long term disability insurance as a standard benefit, and they also give me to option to make it taxable. From what I can tell, this means:
- The premium is added to my taxable income
- If I'm actually disabled, I won't have to pay taxes on the benefits
It seems to me that taxing it now is a good deal, since the premiums aren't very expensive (around $200/year seems standard), and the benefits are much more (potential to entirely replace your current income).
This seems like a no-brainer to me, but I can't find any commentary on pros/cons, which makes me uncomfortable. Am I missing anything?