For which type of life coverage can an employer deduct premium payments as an ordinary business expense?

Employers can deduct premium payments for group insurance as an ordinary business expense because it is classified as a benefit provided to employees. Group insurance typically covers a large number of individuals under a single policy, often providing life insurance, health insurance, or other similar benefits. Since this type of insurance is part of the employee compensation package, it qualifies for tax deductions.

In contrast, other options like buy and sell agreements, key employee insurance, and joint life insurance generally do not allow for such deductions. Buy and sell agreements typically involve individual ownership and are not considered a business expense. Key employee insurance is designed to protect an organization against the loss of a critical employee, which generally does not qualify for the same tax treatment as group insurance. Joint life insurance is typically utilized for specific financial arrangements between individuals, and while it may have different tax implications, it does not fall under the same category as group insurance when it comes to business expense deductions.