14 Health Concept and Tax Considerations14.7 Business Disability InsuranceOn this page14.7 Business Disability Insurance Business Overhead Expense Premiums paid by the business are tax-deductible as a business expense. Benefits received are taxable to the business owner and must be reported as income. Key Person Disability Insurance When an employer purchases a disability income policy on a key employee and names the business as the beneficiary, the premiums are not tax-deductible. Benefits received under the policy are generally not taxable. Disability Buy-Sell Agreement Premiums paid are not tax-deductible. Benefits received are generally not subject to taxation.