Close Relationship Between the Home and Business

Business life insurance should particularly appeal to a business man when it is shown that in nearly all instances there is a very close relationship between his home and the business in which he is engaged. So close is this relation that a policy taken for the special conservation of the business may often prove even more valuable than a policy taken out for the direct protection of the family. The latter policy can seldom do more than alleviate in a measure the financial, injury caused by the death of the income-producer, while the former may be the means of successfully continuing in operation the business of the deceased. Had not the former policy been taken out the business might have failed or declined. The family policy usually assures the continuance of a portion only of the insured's income during life, while the business policy., since it conserves the efficiency of the insured business, may be instrumental in bringing about the continuation of a much larger income, viz., the income from a successful business.

Moreover, the owner of a business, generally speaking, conducts the same primarily with a view to supporting a home, thus again showing that the welfare of the home and the welfare of the business are so intimately related as, generally speaking, to be inseparable. On the one hand the advantages of family insurance as discussed in the preceding chapter, such as freedom from worry, increase in initiative, etc., will produce a very wholesome effect upon the welfare of the insured's business, and business success means, as a rule, family happiness and contentment. On the other hand business adversity practically always means family adversity, and, therefore, business insurance which protects the business against disaster is in reality also family insurance since it preserves the family's interest in the income derived from that business.

The speculative risks connected with nearly all business pursuits and the danger of meeting with business failure need not be outlined to men of experience. Suffice it to say that compilations show that the number of actual business failures is exceedingly large, that the amount of failure liabilities over a series of years is about the same as the total fire loss and is equally subject to great fluctuations because of unforeseen contingencies, and that the probability of business mortality is about as great as human mortality at age 41. It is also noteworthy that in a year like 1907 approximately one-fifth of the total number of business failures, involving over 55 percent, of the total failure liabilities, was due to disasters, failure of apparently solvent debtors and undue competition causes which cannot be considered as due to the faults of those who failed while another 37 percent, of the failures were traceable to lack of capital and 5 percent, to inexperience. In every community we meet with instances of once prosperous families reduced to straitened circumstances through failure brought about by the sudden death of the head of the business or of a valued official or employee. At such a time all adverse influences will seem to operate at once against the credit facilities and the competing powers of the business, with the result that the enterprise may go under because of lack of capital and the inexperience of the survivors. But the cruelest results of business failures become apparent when we note the effects upon the homes of the deceased and surviving partners. Here the reduced income may necessitate moving to humble quarters, curtailing expenses, and withdrawing the children from school or college. That such occurrences should be so common is truly a pity when by the employment of life insurance the business might easily have been protected against the dangers referred to.