Any benefits provided by the corporation on behalf of an owner/shareholder/employee of that corporation, is taxable income to the recipient of that benefit. It's value is included in box 1 of their W-2 (if employee) and/or on the K-1 if they are an owner/shareholder. Who owns the policy is irrelevant. If it's for the benefit of the employee/owner/shareholder, then it's taxable income to the recipient.
