Is Employer Paid Group Term Life Insurance Taxable? 
If the amount of employer paid term life insurance is $ 50,000 or below , the value of the employer paid policyis not treated as taxable income to the employee . When the amounts of coverage exceed the $ 50,000 threshold then that excess amount will trigger a taxable income event for `` the economic value '' of policy above $ 50,000 . As policies of this level are commonly sold at the workplace , another consideration is whether your term life insurance was paid for on a pre-tax or after-tax basis under your group 's Section 125 Plan . Unlike with most other types of insurance premium , it is generally best for an employee to pay their term life premium -LRB- or any portion of it -RRB- on an `` after-tax '' basis . This can avoid taxes being taken out of the death benefit . 