Introduction
Life insurance is a benefit that most employers offer to their employees. It is an insurance
policy that provides the designated beneficiary upon an employee’s death, in exchange for either
monthly, annual, or quarterly premium payments (Gelles, 2014). Although not in all states, most
of them allow the life insurance of employees as well as the collection benefits by their stated
spouses and children. However, there various ethical issues surrounding the issue of employee
life insurance including whether companies should be able to benefit or profit from the death of
their employees. This paper seeks to defend the ethical topic of companies benefiting from their
employee’s death.
Overview of Employee Life Insurance Coverage
Life insurance policies are allowed in some states as well as the collection of the death
benefits by the beneficiaries who can be the spouses or children or both. Employee life insurance
policies can be of two types; the basic and the options life insurance coverage. Life insurance
policies change when an employee retires. Different states hold varied laws regarding life
insurance policies and beneficiaries. Basic life coverage or the Term life coverage is given
automatically at zero cost to all the eligible employees through the Group insurance Program for
the State (Peiros & Smyth, 2017). It is provided to both part-time and full-time employee. All the
eligible and active employees are guaranteed an amount that is equal to their annual basic salary
regardless of their age. For the optional life coverage, the employees purchase the insurance
cover at their own expense.
ETHICS TOPIC 2
The benefits of a life insurance policy are often paid upon the death of an employee
although in some circumstances accelerated benefits provide access to a percentage of the life
insurance benefits when an employee is diagnosed with a terminal illness that leaves them with a
life expectancy of a year or less. The beneficiary in a life insurance cover is the individual
designated to receive financial benefits upon the death of the insured employee. A beneficiary
form for life insurance coverage is usually completed by the employee during the
commencement of their employment contract (Peiros & Smyth, 2017). It is the responsibility of
the employee to contact the plan administrator whenever there are changes regarding beneficiary
designation to be made or the beneficiary’s address. In the event of termination of the
employment contract, the life insurance cover also terminates, but it may continue at the
individual’s expense. The critics of the topic say that is unethical and immoral for employers who
