Company-owned life insurance coverage insurance policies, generally known as employer-owned life insurance coverage, contain an organization taking out life insurance coverage insurance policies on its workers, with the corporate because the beneficiary. Because of this upon the demise of the insured worker, the corporate receives the demise profit. These insurance policies can cowl a broad vary of workers, from executives to lower-level employees. For example, a big retailer would possibly buy life insurance coverage insurance policies on hundreds of its workers, aiming to offset prices related to worker turnover or to fund worker profit applications.
The rationale behind such practices usually lies within the potential monetary advantages for the corporate. Demise advantages can be utilized to cowl bills associated to recruiting and coaching replacements, cushion in opposition to misplaced productiveness, or contribute to general profitability. Traditionally, these insurance policies have been justified as a manner for firms to guard themselves in opposition to monetary losses stemming from the surprising demise of key personnel or to supply funding for worker advantages. The follow has, nonetheless, generated controversy as a consequence of moral issues surrounding cashing in on an worker’s demise and the potential for conflicts of curiosity.
