I am going through a buy sell set up with my partner and she can be a game player. One of the provisions is I wanted life insurance for my wife for 20 years. A man quoted me for $650,000 and said it was tax free and that my company would pay the insurer and upon my death, that trust would pay my wife but then a friend told me that it is taxable. I asked the person if true and his statement was "Your company is funding the trust. The trust is funding the policy. This is not a corporately owned plan". Question. Is this true?