If an employer provides all employees with group term life insurance equal to twice the employee's annual salary, an employee with a salary of $50,000 has no gross income from the life insurance protection provided by the employer.

Question

Quizplus · Accepted Answer

The cost of employer-provided group term life insurance coverage that exceeds $50,000 of coverage is considered taxable income to the employee, according to IRS rules. The first $50,000 of coverage is tax-free, but any amount of coverage above that is subject to taxation based on IRS-provided tables for the "cost" of the protection, not the actual premiums paid.

If an Employer Provides All Employees with Group Term Life