Growth of employer-sponsored group life insurance

Monthly Labor Review, Oct, 1991 by Michael Bucci

4 Quoted in C. Manton Eddy, "Development and Significance of group Life Insurance," in Robert D. Eilers and Robert M. Crowe, eds., Group Insurance Handbook (Homewood, IL, Richard D. Irwin, Inc., 1965), p. 48.

5 In 1900, the total amount of life insurance coverage in effect, both ordinary and industrial, was $7.5 billion. This amounted to approximately $100 for each U.S. citizen. By 1989, there was $8.7 trillion in life insurance coverage, including ordinary, group, industrial, and credit. This amounted to approximately $35,000 for each U.S. citizen. See 1990 Life insurance Fact Book (Washington, American Council of Life Insurance, 1990).

6 The extent of the operations of mutual benefit associations has been traced in several BLS reports. See Welfare Work for Employees in Industrial Establishments in the United States, Bulletin 250 (Bureau of Labor Statistics, 1919); and Health and Recreation Activities in Industrial Establishments, 1926, Bulletin 458 (Bureau of Labor Statistics, 1928). See also Experience with Mutual Benefit Associations in the United States, Research Report 65 (New York, National Industrial Conference Board, 1923).

7 Wendell Milliman, "Rationale of Employee Benefit Plans," in Eilers and Crowe, eds., Group Insurance Handbook, p.21.

8 Dan M. McGill, Life Insurance (Homewood, IL, Richard D. Irwin, Inc., 1967), p. 693.

9 Robert I. Mehr, Life Insurance: Theory and Practice (Dallas, TX, Business Publications, Inc., 1977), pp. 279-80.

10 While a tax on corporations had been instituted during the Civil War, it was discontinued in 1872.

11 Milliman, "Rationale of Employee Benefit Plans," p.21.

12 Welfare Work for Employees in Industrial Establishments in the United States, Bulletin 250 (Bureau of Labor Statistics, 1919), p. I 10.

13 Eddy, "Development and Significance of Group Life Insurance," p. 45.

14 L.O. 1014, Internal Revenue Cumulative Bulletin 1920-22,p.88.

15 The proceeds from a life insurance policy are not subject to Federal income tax. However, they may be subject to estate taxes, depending on the amount of the policy.

16 These figures include all forms of group life insurance, including policies issued to unions, professional societies, employee associations, savings and investment groups, and other such organizations. At the end of 1988, 83.1 percent of the group policies in force took the form of employer-provided coverage. See 1990 Life Insurance Fact Book,pp.30-31,

17 Ibid.

18 Ibid.

19 Employee Benefits in Medium and Large Firms, 1989, Bulletin 2363 (Bureau of Labor Statistics, 1990).

20 In 1933, unions claimed 3.5 million members, or 14.7 percent of the nonagricultural work force. In 1945, union membership had risen to 12.3 million employees, or 30.4 percent of nonagricultural workers. See Leo Troy and Neil Sheflin, Union Sourcebook (West Orange, N), IRDIS, 1985).

21 W. W. Cross & Co., Inc. v. National Labor Relations Board, 174 F.2d 875, U.S. Court of Appeals, First Circuit, May 24, 1949.

22 Eddy, "Development of Group Life Insurance," pp. 46-47.