Should Companies Profit When Employees Die?
Some companies have found a very creepy way to increase their bottom line. They are buying life insurance policies for employees in which the company and not the family receives the tax free payout in the event of the employees death. Millions of American workers have no knowledge that these policies have been taken out on them by companies with such prominent names as Dow Chemical, Walmart and AT&T. These whole life policies are known in the business as “Dead Janitor” or “Dead Peasant” policies and are a fairly common practice. Another financial benefit for the company is allowing them to borrow against these policies while the employee is still alive. In yet another crazy twist, the employee does not even need to be currently employed by the company at the time of their death for the company to keep the policy active, which makes the likelihood of a future payout even greater.
Many states require companies to inform their employees when they take out a life insurance policy against them. Due to the awkward nature of this, companies have found a loophole to keep from informing their employees of the policy by having them written in states such as Georgia that don’t require employee consent. In this case, it would be almost impossible to determine if your company has a policy on you.
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In: Business Stories · Tagged with: Amp, Awkward Nature, Bottom Line, Buying Life Insurance, Crazy Twist, Dow Chemical, Financial Benefit, Insurance, Janitor, Life Insurance Policies, Life Insurance Policy, Life Policies, Likelihood, Loophole, Peasant, Salary Information, Walmart, Whole Life
