### Question
How is the "employer-owned life insurance contract" defined?


### Answer
The term **employer-owned life insurance contract** is defined in *26 U.S.C. § 101* as follows -

> a life insurance contract which—



(i) is owned by a person engaged in a trade or business and under which such person (or a related person described in subparagraph (B)(ii)) is directly or indirectly a beneficiary under the contract, and



(ii) covers the life of an insured who is an employee with respect to the trade or business of the applicable policyholder on the date the contract is issued

#### Citation:
  - *26 U.S.C. § 101*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART III-ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME**

