Group-term life insurance is a popular benefit offered by employers, and most employees choose to participate when provided the opportunity. However, despite the prevalence of these policies, plan sponsors and participants often do not have a good handle on the applicable tax issues. Specifically, up to $50,000 of employer-provided group-term life insurance coverage may be excluded from income of the employee. However, multiple factors impact whether the exclusion applies, including whether the group-term life insurance plan is discriminatory, how the premiums are paid, and whether or not the plan is considered “carried” by the employer. If not eligible for exclusion, the coverage must be imputed income to the employee.
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Insurance products and services offered through McGriff Insurance Services, Inc., a subsidiary of Truist Insurance Holdings, Inc., are not a deposit, not FDIC insured, not guaranteed by a bank, not insured by any federal government agency and may go down in value.
McGriff Insurance Services, Inc. CA License #0C64544