officer life insurance

Insurance agent ( without speaking to me) tries to sells my client a whole life policy for $1,000,000 each to 2 officers of a C corporation. The insurance covers the life of each officer/shareholder while the other officer/shareholder is the owner of the policy. The wife of each insured is the beneficiary. The life insurance agent tells the client that the corporation can pay the premium , take the deduction at the corporate level and the insurance benefit is not taxable to the officer/ shareholders.
I would say that in this case the insurance premium paid the C Corp. would be a taxable employee benefit to the officer/shareholders. Can the corporation take the benefit as a deduction ? Would it be more advantageous for the corporation to be an S Corp given the payment of the premium which will be $60,000 per year.

All of the above cannot be true in its entirety. To nail down the false statements, we would have to review the policy documents.

When I questioned the life insurance agent he agreed that term is a better way to go

When I questioned the life insurance agent he agreed that term is a better way to go

But it sounds like insurance for a cross-purchase agreement where whole life might be needed. It would not be the first buy-sell that wasn't properly thought out or implemented.

if the beneficiaries are the wives...the premiums should be included in the W-2. i don't think corp can pay/take the deduction when this is really a personal policy.

even if corp is the beneficiary, the corp still shouldn't take the deduction because the benefit would become taxable.