The agent selling the policy should know the details of the tax implications. Just make sure you clearly understand how the policy is written. Salesmen lie to earn a commission.
Agreed, there is lying and fraud in every occupation, none are exempt for sure. As for the tax issues, if you pay the premium with after tax dollars then the claim time benefits will be tax free. If you pay the policy with pre-tax dollars then you will have a taxable benefit at claim time. The other option I have seen from some Tax Lawyers and CPA's is if you are a business then you can establish a disability reimbursement plan but you should talk to your CPA or Tax Attorney for details and functionality.
