3950 / How is the amount of taxable income determined when term insurance is provided under a qualified plan?

Where individual or group term life insurance is provided under a qualified plan, the cost of the entire amount of protection is taxable to employees. No part of the coverage of group term insurance is exempt under IRC Section 79 ( Q 246).¹ Moreover, the cost of the insurance protection cannot be determined by use of the special group term rates that are applicable to taxing excess group term life insurance purchased directly by an employer.² It is not settled whether the taxable amount is the actual premium or the P.S. 58 (now Table 2001) cost.