The corporation can reimburse the shareholder for expenses on the vacation home under an accountable plan. I suggest this method for the period of time the corporation uses the property for expenses that are ordinary and necessary in the course of business (I'll assume yours are).
If the IRS questions your personal use status (they might):
For weeks the shareholder gets any benefit, directly or indirectly through related parties, this will serve to reduce allowable deductions for the rental property (IRC 267(e)(1)).
Because I assume you are also an employee of the corporation, you may not deduct rental expenses of the vacation home under IRC 267(c)(6) if you both use the home for performing services as an employee of the employer and you rent to that employer. This will come down to the specific facts and circumstances of your case (conservatively, I believe you will be considered as having performed services for your employer when it's the companies clients staying in your rental home). When this happens, non of your rental expenses are deductible (save perhaps on Schedule A, but not on Schedule E).
For the life insurance, treat it as compensation to you and it's deductible to the corporation (ie, wage income to you and a deduction to the corporation, though see the group term life plan options etc. as you already pointed out). From there, life insurance premiums are not generally deductible or proceeds taxable, which is generally the way people want to keep it.
I do not suggest going about trying to deduct your insurance in any way that makes the corporation liable for taxes on proceeds from insurance. If the corporation is not the beneficiary, but you are (directly or indirectly through related parties), see above. For your unrelated employee (that buys insurance not for you, and not where you are the beneficiary), to the extent you are unable to set up a plan for that employee's life insurance it is still deductible to you, it just may be also considered income to that employee.
Thank you for your question.
§ 280A. Disallowance of certain expenses in connection with business use of home, rental of vacation homes, etc.
(d) Use as residence
(1) In general For purposes of this section, a taxpayer uses a dwelling unit during the taxable year as a residence if he uses such unit (or portion thereof) for personal purposes for a number of days which exceeds the greater of-
(A) 14 days, or
(B) 10 percent of the number of days during such year for which such unit is rented at a fair rental.
For purposes of subparagraph (B), a unit shall not be treated as rented at a fair rental for any day for which it is used for personal purposes.
Edited by BK-CPA on 9/2/2010 at 2:02 PM EST