245 / Are premiums paid for group term life insurance deductible business expenses?

Yes.

Premiums paid by an employer for group term insurance on the lives of employees are deductible.¹ This is so even if a plan discriminates in favor of key employees ( Q 249).

A corporation may deduct premiums it pays for coverage on the lives of commission salespersons irrespective of whether an employer-employee relationship exists between the salesperson and the corporation.²

No deduction will be allowed for the cost of coverage on the life of an employee if an employer is directly or indirectly a beneficiary under a policy.³

If group term proceeds are to be used to fund a buy-sell agreement between stockholders of a corporation, the IRS may deny the corporation a business expense deduction for its premium payments ( Q 299).

Contributions will not be deductible unless, when considered with all an employee’s other compensation, they are reasonable ( Q 3519).

Current deduction of contributions to a welfare benefit fund ( Q 4090) to provide group life insurance to employees is strictly limited. Contributions to a welfare benefit fund to provide life insurance benefits to employees are subject to certain requirements ( Q 4092).