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Yes - life insurance premium are deductible, but there are some limitations.
Please see for reference IRS publication 535 - http://www.irs.gov/pub/irs-pdf/p535.pdf pages 18-20:
You generally can deduct premiums you pay for the following kinds of insurance related to your trade or business.
-- Life insurance covering your officers and employees if you are not directly or indirectly a beneficiary under the contract.
You cannot deduct premiums on ... certain life insurance and annuities:
For contracts issued before June 9, 1997, you cannot deduct the premiums on a life insurance policy covering you, an employee, or any person with a financial interest in your business if you are directly or indirectly a beneficiary of the policy. You are included among possible beneficiaries of the policy if the policy owner is obligated to repay a loan from you using the proceeds of the policy. A person has a financial interest in your business if the person is an owner or part owner of the business or has lent money to the business.
For contracts issued after June 8, 1997, you generally cannot deduct the premiums on any life insurance policy, endowment contract, or annuity contract if you are directly or indirectly a beneficiary. The disallowance applies without regard to whom the policy covers.
Partners. If, as a partner in a partnership, you take out an insurance policy on your own life and name your partners as beneficiaries to induce them to retain their investments in the partnership, you are considered a beneficiary. You cannot deduct the insurance premiums.
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