I’m a 33-year old doctor who receives free group-term life insurance. How am I taxed on this benefit?

Group-term life insurance up to $50,000 of coverage is tax free to employees, former employees, and leased employees (there’s a $2,000 cap on coverage for spouse and dependents). Group-term life insurance for workers in excess of this amount is taxable based on an IRS table and not on the actual cost of the coverage. Under the IRS table, assuming that the worker who is age 33 and pays nothing for group-term life insurance has income of 8 cents per month for each $1,000 of coverage over $50,000. If coverage is $100,000, then the income from the excess $50,000 of coverage is $48 (50 ´ 0.08 ´ 12). The company paying for this benefit figures the taxable amount and reports it to you.