Does your boss want you dead?

[TXlib]

Does your boss want you dead?
'Dead peasants' insurance pays your employer a secret, tax-free windfall when you die. Insurers have sold millions of policies to companies such as Dow Chemical.

By Liz Pulliam Weston

Right now, your company could have a life insurance policy on you that you know nothing about. When you die -- perhaps years after you leave your employer -- the tax-free proceeds from this policy wouldn’t go to your family. The money would go to the company.

What’s more, the company might use this policy to pay for retirement benefits and other perks not for you or your fellow workers, but for your company’s top executives.

More...

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After reading this article, how do you feel about this practice?

[DarkSim]

1. Thank god i live and work in China.

My company taking life insurance for me is the least of my worries here.

[TXlib]

2. OK, follow up question...

What about this practice makes you feel it ought to be illegal?

Aside from the emotional anecdotes of families who suffered the loss of a family member, who didn't get a penny of the insurance (which they WERE NOT paying for, remember), what bothers you about it?

[DebJ]

3. I used to work in the insurance industry. I believe this should be

classified as a 'moral hazard'.
For example, I can not buy a life insurance policy for, say, my next door neighbor, and thereby profit from his death. It has to be say my husband or child, I believe.

[DebJ]

5. My mother tried to get my grandmother (her mother-in-law) to sign an

insurance policy that my parents were going to pay for. This was when she was in her late 70's, early 80's. She refused, and then the family was forced to come up with the funds to transport her from North Dakota, where she had moved to live near her daughter, all the way to Washington, DC, where her gravesite was next to my grandfather.

My parents could not buy the insurance; they could PAY for it, but only she could sign for the policy.

For employees who are critical to a business (like owners, directors, VP's, creative talents), the insurance makes sense. For people who make less unique contributions, god knows we are easily replaceable, especially in THIS economic environment, so it makes no more sense than a policy that pays if an employee just quits and goes to work somewhere else....you have 'replacement costs' in that situation,too.

[OKNancy]

17. I thought about taking out a policy after one of my employees was killed

in a car accident. She was 36.
At my dance school, the teachers develop a following. When one of my dear teachers died, I lost a few students because they had developed an affection for her and didn't want to take from anyone else. It made me think about another employee. She not only has a huge following but is also my right-hand-woman ( she has been with me 15 years) If something happened to her, my business would be devastated. I looked into getting a policy on her so that I could weather the hard times that would surely come if something horrible happened.

[silverlib]

20. I don't think this is the intention of WalMart...

I don't think there business, or most businesses that do this, are concerned about the effect on the business. There is nothing wrong with life insurance polices where the insured is accepting of the insurance. I hope you have a life insurance policy on the employee so her family can weather the financial devastation.

[OKNancy]

24. Yes I know about the Walmart business

I was just trying to give an example where it would be a smart thing to do.

I don't have life insurance for her family, I'm sure her husband can take care of that. Her children are grown...and I can barely make ends meet myself.

[TXlib]

6. Maybe for rank-and-file employees it would be considered a moral hazard

But what about key employees whos loss would devastate the company?

There is, IMHO, a legitimate reason for life insurance in that case.

[PVnRT]

4. News flash

Your boss would kill you in your sleep and sell off your organs if he/she thought there was a profit to be made.

[TXlib]

7. Depends on whether you're talking large corporation or small business...

[YellowRubberDuckie]

8. I don't understand how this is possibly legal...

My brother took out life insurance on my dad and went to jail for it. But a guy I barely know that I just work for can take out a life insurance policy on me, and that's perfectly legal? There's something wrong there.
Duckie

[TXlib]

9. The legality may vary from state to state.

Ummm, your brother didn't, by any chance, off your dad after taking out the insurance policy, did he? Because that a whole 'nother ball of wax...

[YellowRubberDuckie]

13. No, Dad died of natural causes...

His three pack a day smoking habit...if you can call that natural.
Duckie

[jmowreader]

15. It's called "insuring corporate assets"

They insure the building, right? They insure all of the equipment in the building, right? That way, when the flood hits and burns out all of the motors in the shop, they won't go out of business.

Under the "dead peasant" theory, if you get killed, the insurance money will help tide them over until they can find a replacement for you.

[YellowRubberDuckie]

22. And you think that's ok ?

They're SAVING money if I die and they don't have to pay me. That's a weak argument, and it's just dumb.
Duckie

[jmowreader]

25. Hell no I don't think that's OK!

But that's the logic here! "Yeah, if Joe falls in the chicken plucker and gets pulled to shreds, it's going to be awful hard to find a replacement for him. So we have to be Insured!"

But since it's fairly easy to find someone to run the chicken plucker, that argument falls completely apart...but not the motivation to leave all the guards off the chicken plucker and turn up the speed, so Joe has a better chance of falling in it and allowing the company to collect on his insurance.

This kind of insurance is justifiable when we're talking unique individuals--the woman who designs all the company's handbags, say--but for rank-and-file employees, it's not.

[Bertha Venation]

10. Yes! She does!

That was my reaction when I saw the subject. She despises that I have a life, and that her law practice is not my number one priority, and that I put Mrs. V.'s health & well-being before everything (I have to take time off work to take her to appointments sometimes). So yeah, I think she'd like to kill me. OTOH, I'm the best secretary she's ever had, and she knows it. :shrug:

I realize this has nothing to do with the topic. Just felt like a little rant. TYFL.

[HEyHEY]

11. I don't know. Do I get to take out a policy on my boss?

Let's even it up

[Cuban_Liberal]

12. Nope.

He's said on more than one occasion that he will kick my butt if I get myself killed (serious/half-joking). :P

[silverlib]

14. Phil Graham and the Texas Retirement System...

Currently, Phil Graham is working, through his employment at an investment firm, to sell life insurance to the State of Texas Teacher Retirement System on retired teachers so that when they die, the TRS can make up for their recent losses, mainly due to investments in Enron.

I wish I had the link! It hit the news several weeks ago, and "good hair" said that this would never be done without the "insured's approval." Yeah, right!!!

Graham profits at both ends, once again. First his wife sat on Enron's BOD and now he profits by helping the State of Texas make up losses.

[SheWhoMustBeObeyed]

16. I vote Other

I understand the need for "executive" policies because of the investment that many employees represent. But I wasn't aware the policies remain valid after employment is terminated. How am I an asset to a company that no longer employs me, and why should the company benefit from my very existence?

I believe employees should be informed about the policies, but so far as having a choice whether to grant or refuse permission, that sounds like a good way to short-circuit one's advancement.

I don't agree with the "janitor" policies. When a job requires little training, the cost of replacing an employee doesn't justify insurance. (I'm not referring to the skills an employee brings to a job, but the actual training the company provides, which often continues throughout an employee's tenure.) In this case the company is taking advantage of an established practice to make money off people whose employee benefits are already meagre compared to the more highly skilled.

It's one thing to protect an employee investment, another to wring the literal last dime out of it.

[Tracer]

18. No. But Often, I Wanted my Boss Dead.

This was prior to my leaving and becoming self-employed.

I had a fantasy all worked up to poison his coffee and watch while he drank it and, clutching his throat, sank squirming and writhing on the floor.

[jmowreader]

19. I'm fairly certain my old boss wanted someone dead

We had an old Caterpillar 3000-pound-capacity forklift. It didn't have a seat belt and OSHA fined them $2500 for that. They got fined $5000 for a defective rollover protective structure, and it had a very small stability triangle so it was very vulnerable to turning over. It left a trail of hydraulic fluid everywhere it went (they figured it was cheaper to dump motor oil into the reservoir once a week--not hydraulic fluid, but motor oil--than to replace the worn-out $30 hose on the sideshift mechanism) and they got fined $650 by the state environmental department for that. Skids of paper weigh over 3000 pounds, so every time they turned the thing on they committed a federal offense. It didn't have a backup alarm or warning light--that's good for a $500 fine.

How they got caught: The day before Memorial Day last year, we had a huge rainstorm that flooded the building. Two days later, we started cleaning up. I stopped by the store and picked up my forklift license so I could drive. I was loading ruined cardboard boxes into the paper-recycling trailer with this shitty forklift when I needed to get up into the trailer to move something with a pallet jack. I set the parking brake, dismounted and got up into the trailer. What I didn't know was that the parking brake didn't work either--the cable was broken. The forklift rolled down this little ramp, the wheels turned, and it rolled right over the edge of the loading dock. We called the fire department to take the fuel tank off the machine. They noticed that the parking brake was set--a forklift with the parking brake set shouldn't move when the slope is half an inch of rise per foot of run--and called OSHA.

The OSHA guy came out and asked me what happened. "I parked it there, dropped the forks, set the brake, turned off the engine with it in gear and got off. It rolled into the pit." The boss was screaming, "why were you driving it? You haven't been trained!" I pulled out my license (renewed two months before--with certification for that specific class of machine on it) and showed it to the OSHA guy. The boss looked at me and said, "they have licenses for these things?" Wrong thing to say to an OSHA guy! There is a federal requirement that all materials-handling equipment operators be licensed on each class of equipment they use, and that the license be renewed annually. And except for me, no one in the building was. That's good for a $2500 fine--per unlicensed operator, and they had twelve of them. They also got nailed on storing the spare LPG tank inside the building. They didn't get nailed on the 40 overweight skids of paper sitting on the floor because they couldn't prove they'd been moved with this forklift--after all, the paper company could have driven them in with a proper size forklift--but they were warned to get a larger forklift.

I got marching orders immediately after the guy left: "It is Tuesday. On Friday, we will have a new forklift, a certification program and everyone in the company will be certified. I don't care what it costs or how long you have to work to do it. And you're going to take care of it." Did he care about the employees, or the law? No, he cared about not getting another OSHA fine. So I bought a Toyota forklift, which is simultaneously the safest brand to drive and the most expensive brand you can get. Besides, they come in the most lovely shade of orange. This guy was into extremes--when OSHA told him his MSDS collection was lacking, he made me find him one for every chemical used in the building, including water. Yes, there is an MSDS for water. Beforehand, he was only missing the MSDS for ink, isopropyl alcohol, three of the four cleaning solvents he used, paper dust and propane.

It is so much nicer to work for a company that does more than pay lip service to safety.

[VOX]

21. Work in non-profit sector. And I have a very cool boss...

I've had my fair share of nutcases over the years, but my current boss (1995-present) is totally cool.

[blindpig]

23. I'm my own boss

where do I sign up?