Tax TreatmentQuestion 227 of 716
Under IRC §79, how much employer-paid group term life insurance coverage may an employee receive each year without imputed income?
a.There is no exclusion; all employer-paid coverage is imputed income
b.Up to $50,000 of coverage
c.Up to $100,000 of coverage
d.Unlimited coverage if the plan is non-discriminatory
Explanation
IRC §79 excludes the cost of the first $50,000 of employer-paid group term life coverage from the employee's gross income. The cost of coverage above $50,000 is imputed to the employee using IRS Table I rates.
Law Reference: IRC §79This topic, taught in full in the California Life & Health Insurance Producer Exam guide. California Life & Health Insurance Producer Exam — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
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Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)