This exclusion applies to life insurance coverage which is provided to a group of employees.See details here https://www.irs
.gov/pub/irs-pdf/p15b.pdfBut there is The 10-employee rule. Generally, life insurance isn't group-term life insurance unless you provide it to at least 10 full-time employees at some time during the year.For this rule, count employees who choose not to receive the insurance unless, to receive it, they must con-tribute to the cost of benefits
other than the group-term life insurance. For example, count an employee who could receive insurance by paying part of the cost, even if that employee chooses not to receive it. However, don't count an employee who must pay part or all of the cost of permanent benefits to get insurance, unless that employee chooses to receive it. A permanent benefit is an economic value extending beyond one policy year (for example, a paid-up or cash-surrender value) that is provided under a life insurance policy.Exceptions. Even if you don't meet the 10-employee rule, two exceptions allow you to treat insurance as group-term life insurance.Under the first exception, you don't have to meet the 10-employee rule if all the following conditions are met.1. If evidence that the employee is insurable is required, it is limited to a medical
questionnaire (completed by the employee) that doesn't require a physical.2. You provide the insurance to all your full-time employees or, if the insurer requires the evidence mentioned in (1), to all full-time employees who provide evidence the insurer accepts.3. You figure the coverage based on either a uniform percentage of pay or the insurer's coverage brackets that meet certain requirements..Exception for key employees. Generally, if your group-term life insurance plan favors key employees as to participation or benefits, you must include the entire cost of the insurance in your key employees' wages. This exception generally doesn't apply to church plans. When fig-uring social security and Medicare
taxes, you must also include the entire cost in the employees' wages. Include the cost in boxes 1, 3, and 5 of Form W-2
.So far - if your corporation pays YOUR life insurance - that amount MUST be included into wages and reported on your W2 form.