If the amount of employer paid term life insurance is $50,000 or below, the value of the employer paid policy is not treated as taxable income to the employee. When the amounts of coverage exceed the $50,000 threshold then that excess amount will trigger a taxable income event for "the economic value" of policy above $50,000.
As policies of this level are commonly sold at the workplace, another consideration is whether your term life insurance was paid for on a pre-tax or after-tax basis under your group's Section 125 Plan. Unlike with most other types of insurance premium, it is generally best for an employee to pay their term life premium (or any portion of it) on an "after-tax" basis. This can avoid taxes being taken out of the death benefit.
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As policies of this level are commonly sold at the workplace, another consideration is whether your term life insurance was paid for on a pre-tax or after-tax basis under your group's Section 125 Plan. Unlike with most other types of insurance premium, it is generally best for an employee to pay their term life premium (or any portion of it) on an "after-tax" basis. This can avoid taxes being taken out of the death benefit.