IIRC, if the officer/employee pays taxes on the benefit (in this case, the life insurance premium) the death benefit is not taxed. If he does not pay taxes on the premium, the death benefit (or some part of it) may be taxed. Not sure of all the details, those more versed in the accounting aspect might comment.

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1983 M-B 240D-Gone too.
1976 M-B 300D-Departed.

"Good" is the worst enemy of "Great".