Section 79 group life insurance refers to the Internal Revenue Code provision that governs the tax treatment of employer-provided group term life insurance. Under Section 79, employees generally receive the first $50,000 of employer-paid group term coverage as an income-tax-free benefit. The cost of coverage above $50,000, calculated using IRS Table I rates, is treated as imputed income and reported on the employee's W-2. Certain discriminatory plans or permanent benefit features can change the tax treatment. Section 79 plays a key role in how employers structure basic group life benefits and communicate their tax impact to employees.

Benefits advisers explain Section 79 group life insurance rules when helping employers design core life coverage packages. They illustrate how much term insurance can be provided on a tax-free basis and how imputed income for excess coverage is calculated. For executives seeking higher amounts of permanent coverage, planners may contrast Section 79 group benefits with supplemental voluntary term, individual policies, or executive bonus plans. Payroll departments rely on Section 79 guidelines to handle W-2 reporting correctly. Understanding Section 79 group life insurance allows advisors to integrate employer-paid coverage into a cohesive personal protection plan and avoid confusion over small amounts of imputed income on year-end tax forms.