I think the way it works is the company sets up an offshore subsidiary to provide life insurance to its employees in a low tax jurisdiction. Next, they pay life insurance premiums to the offshore subsidiary, and the offshore subsidiary books the profits on the life insurance policy offshore.

For example, suppose they pay $1,000,000 premiums to the offshore subsidiary, and then pay out $800,000 in claims. The offshore subsidiary has a profit of $200,000, and the on-shore company has an extra $200,000 to write off.