### Question
Can you define what employer-owned life insurance contract means?


### Answer
**Employer-owned life insurance contract** is defined as the following in *26 U.S.C. § 101*:

> 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**

