Not so fast...
OK - lets look at what the regs specifically state:
Section 1.264-1(a) provides that the premiums paid for life insurance on the life of any officer, employee, or person financially interested in a business carried on by the taxpayer are not deductible where the taxpayer is directly or indirectly a beneficiary of the policy.
OK - so the way I interpret this reg is that IF the corporation is the benficiary, either directly or indirectly, THEN the premiums are not deductible. However, if we look at the inverse of this, one could argue that IF the corporation is NOT the beneficiary, either directly or indirectly, THEN the life insurance premium IS fully deductible by the corporation.
However... then there are some fringe benefit rules that may have taxable income consequences to the covered employee/officer, specifically:
IRC section 79 provides an exclusion for the first $50,000 of group-term life insurance coverage provided under a policy carried directly or indirectly by an employer. There are no tax consequences to the policy holder (i.e., the covered employee/officer) if the total amount of such policies does not exceed $50,000. The imputed cost of coverage in excess of $50,000 must be included in the employee's/officer's income, using the IRS Premium Table, and are subject to social security and Medicare taxes.
But this begs the question, "Does IRC section 79 apply only to group term life insurance coverage? or is it intended to apply to non-group term life insurance as well?" The code specifically defines group term life insurance as well... So I'm looking for someplace in the code that specifically disallows life insurance premiums as a deduction for a C-Corp when the beneficiary is NOT the corporation. The only M-3 adjustments I've seen corporations make for life insurance premiums is when the policies are owned by the corporation (i.e., Corporate Owned Life Insurance - or COLI) - and generally this only occurs for "Key Officers and Employees" and seems fairly rare in my experience with large corporations.