Short answer: Often yes, through the policy’s waiver of premium provision, if the employee meets the contract’s definition of total disability and files the claim on time. The tax code also keeps employer-paid coverage on a disabled former employee out of the imputed income rule.
Most group life contracts include a waiver of premium: an employee who becomes totally disabled before a stated age, and stays disabled through a waiting period, keeps the life coverage in force without premium while disabled. The ages, waiting period, definition of disability and filing deadline are all contract terms, so read the certificate.
This is the item most often missed at termination. A disabled employee whose employment ends is exactly the person whose life coverage matters most, and if no waiver claim is filed, the coverage can simply end. Make sure the employer files the waiver claim, or at least tells the employee about conversion, before the deadlines pass.
On taxes, the imputed income rule for coverage over $50,000 does not apply to employer-provided group term life on a former employee who terminated employment and is disabled.