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Are returns from insurance premiums taxable?

 
3 Replies
LeonardS
Expert Alumni

Are returns from insurance premiums taxable?

No, refunds from insurance premiums are not taxable.  They are a refund of your premium payments.

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Scruffy165
Returning Member

Are returns from insurance premiums taxable?

Hi,  So, I had a Disability Income Protection Policy that had a "Return of Premium Rider". I never had a disability claim , and after 20 years at age 66 received a check for the return of premium. Then I received a IRS form 1099-R that has box 1 showing the distribution amount and Box 2a for the amount as "Taxable". Box 7 has the code "7" showing.  I thought is was receiving money back? What form do I need to fill in and how do I resolve the distribution so I am not taxed? Thank you for your help in advance, [removed].

ThomasM125
Employee Tax Expert

Are returns from insurance premiums taxable?

Sometimes distributions from disability policies are taxable, especially when your employer pays the premiums. Did you pay the premiums or did your employer pay them?

 

If the insurance company coded the distributions as taxable, they must have had a reason to do so.

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