Is Disability Insurance A Good Investment? 
No . Disability Insurance is a terrible `` investment '' because you may never get any return on the money you pay in -LRB- premium -RRB- . If you have a `` return-of-premium '' on the policy and never apply for the replacement of income due to accident or injury , you 'll get money back , but you lose the time value of the money you paid in over all those years . However , all of that is due to the fact that no insurance policy , DI or otherwise , is designed to be an `` investment '' . Buying a DI policy does not provide a `` return '' that exceeds money paid in premium unless there is an event that triggers the payout of benefits . Benefits are not technically an investment return . If premiums are paid out-of-pocket , the benefits are not even income-taxable . In other words , one buys DI insurance not to `` get gain '' but to be `` made whole '' . This may appear to be a semantics problem , but it is not . One should never look at the payment of premium into a DI policy as an investment . One may look at the payment of premium into a DI policy as `` insuring a portion of one 's income against loss due to a prolonged recovery from accident or illness . '' 