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October 1989, Vol. 112, No. 10
Employer-sponsored life insurance: a new look
Adam Z. Bellet
Employer-sponsored life insurance is an important source of survivor protection for working men and women. Benefits are available both to assist with immediate expenses and to make up for the loss of family income. Amounts of life insurance benefits can vary widely. As one example, white-collar workers more commonly receive benefits based on their salary, while blue-collar workers are more likely to receive a fixed-dollar benefit. This difference is pointed up in a new analysis, which looks at average life insurance amounts derived from all benefit formulas.
In 1988, 92 percent of full-time employees of medium-sized and large private firms participated in life insurance plans financed wholly or partly by their employers. Insurance protection at 10 years of service ranged from an average of $20,020 if earnings were $15,000 a year to $54,440 if earnings were $55,000. On average, amounts of insurance rose only slightly with length of service. Thus, at 30 years' seniority, benefits averaged $20,161 and $54,581 at the aforementioned earnings levels.
These findings are from an analysis of insurance plan provisions obtained through the Bureau of Labor Statistics' 1988 Employee Benefits Survey. Data were collected from U.S. private firms employing at least 100 workers. The survey, which did not include Alaska and Hawaii, used a sample of 2,493 establishments that represented almost 107,000 firms with more than 31 million full-time employees. Data are presented for all types of workers combined and separately for three broad occupational groups: professional and administrative, technical and clerical, and production and service workers. The first two groups together are often labeled white-collar workers, in contrast to the blue-collar production and service workers.1
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Footnotes
1 Excluded from coverage in the
survey are benefits for executive management, part-time, seasonal, and temporary
employees, as well as for employees who are on regular travel assignments (such as
airplane crews and long-distance truckdrivers). In addition to life insurance, the survey
examines the incidence and detailed characteristics of health care, short- and long-term
disability insurance, retirement, and capital accumulation plans, and a number of paid and
unpaid time-off items. It also reports on eligibility for a variety of other benefits. Key
findings of the 1988 survey are in Employee Benefits in Medium and Large Firms, 1988, Bulletin
2336 (Bureau of Labor Statistics, 1989).
Survivor income benefits provided by employers.
—June 1991.Life insurance benefits for retired workers.
—Sept. 1990.Within Monthly Labor Review Online:
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