Business Life Insurance.

Business Life Insurance. By Ralph Sanborn '17. F. S. Crofts & Cos., N. Y.

The use of life insurance for the protection of the family, and to assure an income for old age, has become well nigh universal in this country during recent years. Its possibilities for other purposes are only beginning to be recognized. Among these possibilities are many chances for its use in the protection of business organizations against the serious losses in cash and credit which inevitably accompany the removal by death of an important member of the organization, of an expert specially or of an otherwise valuable employee. The reason that insurance is not more widely used for this form of protection is wide-spread ignorance of its possibilities and this is largely due to the fact that the average agent hesitates to recommend to his client a form of business so complicated that there is possibility of serious mistakes which would frustrate the purpose of the insurance. The difficulty lies largely in the lack of uniformity in the different states of corporation, partnership, and tax laws. This makes it difficult for the agent to master the situation and to recommend with confidence a plan to cover a situation which is often in itself complicated.

Mr. Sanborn's book is designed to clarify the situation both for the underwriter and for the business man. It is written in nontechnical language but a knowledge of the fundamental principles of life insurance and of the different forms of policy available is presupposed. It is not a piece of sales literature intended to awaken the interest of a possible prospect but rather a clearcut discussion of the means available for meeting a need already recognized.

Introductory chapters deal with questions common to all forms of business life insurance. Then a section is devoted to each of the three forms of business organization, Corporations, Partnerships, and Proprietorships. In each section are discussed the special needs of the organization such as credit reinforcement, direct compensation, liquidation funds, form of agreement, etc. Then follows a discussion of the recognized methods of meeting these needs, the policy forms to be used, the designation of beneficiaries, and the pitfalls to be avoided. A number of illustrations are given of specific needs which have been covered by insurance, showing the method by which they were covered. In some cases copies of the special agreements covering the disposition of the proceeds of the policies are given. Everywhere the absolute necessity of having such agreements is emphasized and also the necessity of having them drawn by the firm's own attorney with the cooperation of the underwriter and the legal department of the insuring company.

Finally the writer points out the necessity of complete confidence and cooperation between the client and the underwriter in order that satisfactory results may be realized. He also emphasizes the need of this form of protection not only for the large firm but especially for the small business whose very life may be threatened by the lack of ready money at the moment of readjustment.

Mr. Sanborn has covered the subject clearly and as fully as is desirable for his purpose. Much is necessarily left to the individual underwriter, who should understand thoroughly the laws of his own state, and to the attorney upon whom final responsibility must rest. The book is systematically arranged and fully indexed. Finally the publishers have done an excellent piece of work.

Mr. Sanborn has made a welcome addition to the scarce nontechnical literature of this important subject of Business Life Insurance.