The Insurance of Employees for the Benefit of Their Families

The Insurance of Employees for the Benefit of Their
Families.Thus far attention has been called to the
insurance of officials and valuable employees for the bene-
fit of the business with which they are connected. Numer-
ous policies, however, are issued to-day which have for
their purpose the insurance of the rank and file of the em-
ployees in any given line of business for the benefit of their
families, although the employer pays all or a portion of the
premiums. Although such insurance appears to be primarily
family insurance, it also serves a useful business purpose in
increasing the efficiency of the employer's working force.
Long service on the part of employees is deemed desirable by
employers as one of the best means of keeping up the quality
and keeping down the cost of the product. Frequent change
in the labor force not only necessitates constant instruction,
but, in the long run, spells loss through inefficiency. It is,
therefore, with a view to lengthening the service of its em-
ployees that many corporations and firms have adopted the
profit-sharing plan or are maintaining for their employees,
at considerable expense, comprehensive pension or insurance
plans.

A great variety of methods is used in this respect, but all
have the same general purpose, viz., the elimination of the
loss that is connected with frequent changes in the working
personnel. Sometimes the employer accomplishes this pur-
pose through a plan of self-insurance, while in other in-
stances the insurance protection is obtained from a company.
Sometimes the plan simply provides for the payment to the
deceased employee's family of a stipulated pension or a lump
sum of insurance, while in other instances, and this is com-
ing to be regarded as preferable, the insurance does not ma-
ture as a lump sum payment but the proceeds are paid to the
beneficiary in annual, semi-annual, quarterly or monthly in-
stallments. Again the employer may seek to bind his em-
ployees to himself by rewarding them with an endowment
policy which provides for the payment of a stipulated sum
either in the event of death during a given period like twenty
years, or upon their survival of that period. If the employee
dies during this period and while still in the service of the
employer, the proceeds of the policy pass to the employee's
family either under the lump sum or installment plans of
payment. If, however, the employee remains with the busi-
ness during the entire twenty years the proceeds will at the
end of that period be paid to him directly. Should the em-
ployee cease to remain in the business, the employer usually
has the option of surrendering the policy for its cash value,
or of permitting the employee, if he is willing to refund the
back premiums, to take over and himself carry the policy to
its maturity.

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