I wanted to work on clarifying the question a bit more, because I have the same question... and am a bit confused by the tax code on these items. Here is the fact pattern of my question:
C Corp - (i.e., files form 1120) (closely held - only 1 officer/owner/employee)
C Corp pays life insurance premiums on behalf of owner and his spouse
Owner/Spouse are the beneficiaries on the policy - so this is not a COLI policy as per the IRC since the corporation does not technically "own" the policy.
I know that group term life insurance policies are deductible by a C Corporation, and that the premium on the first 50,000 of coverage is non taxable to the employees/owners.
I cannot find language in the IRC that specifically disallows non-COLI premiums to a C-corporation, and I cannot find a requirement that the life insurance must be "group term" in order to be deductible. If you can find and citate these code/regs then please do so here with specific Code/Reg citations as applicable.