corporate owned insurance... also referred to as
"dead peasants insurance" (
dpi) or "janitor insurance".
its been going on for 50+ years but has been recently popularized by
michael moore's 2009 doc, Capitalism: A Love Story. for those of u who haven't seen his movie, there is a portion of it that basically discusses how blue chip corporations like
wal-mart and
winn dixie have been taking out life insurance policies on their
terminally ill employees (cashiers... tellers... janitors) without the employee's or their family's knowledge... when said employee passes, then the company cashes in. making anywhere from a few thousand to a few million. in the doc,
moore talks with families who feel jilted cause they're left with
numerous hospital bills & debt, while the big wigs are collecting from their loved one's death.

well,
i've learned over time to question everything...
i began researching
dpi and discovered its roots... the technical term for the type of ins that corporations take out on employees is: corporate owned ins (COI). it was created so that in the event of a major executive passing, the company wouldn't suffer any losses. the ins pay off would allow the company to make up for any profit loss the executive would've normally made, and it pays for the company to find & train a replacement.
but it begs the question: why take out ins on low level, low wage employees? who's passing doesn't cost the company a dime!
i found a discussion on this topic @ http://bsalert.com/artsearch.php?fn=2&
dt=1&as=2556...
on it, one of the dudes who works @ an ins company that represents
winn dixie gets to talking. his response to this article was the first i had found of its kind. everything else i found supports what
moore discloses in his doc. but this guy,
lawrence jay
kramer, says that what
i've come to believe is only half true. (i included my two cents to that website because i just can't keep my mouth shut)... in a
separate blog that he wrote (http://tinyurl.com/yld2sfc), he basically tells us what he claims to be the whole truth...
* he agrees that corps. take out ins on their employees...
* because the money spent on ins policies are tax-free, he says that that is the only reason these company's take out
COI...
* his claim is that company's like
winn dixie and
wal-mart actually benefit more the longer their employees are alive because of the tax breaks... because they don't actually get to keep any of the money that is paid to them as the employee's beneficiary, in the event the employee passes away...
* he states that the money awarded to the corporations as beneficiaries has to go back to the ins company in the form of more premiums (so basically this means that the corporation is forced to use the money to take out MORE
COI on other
terminally ill employees).
i don't kno if what this guy is saying is true... he could be full of poo for all we know...
i do, however, realize that what he's saying can be confusing so let me break it down differently:
in my example i,
roxy, will be the corporation... lets say i hire a massage therapist... the massage therapist will represent the employee of the corporation...
i hire a massage therapist who has cancer... i take out life insurance on him because i know
i'll get a tax break for doing so...
i'm basically getting a back rub and tax breaks at the same time... seems like quite the deal so far. i can understand why the corporations want their employees to stay alive,
lol...
my massage therapist passes away... my tax break goes away too... boo
hoo!
as my massage therapist's beneficiary, i get a pay out because of his passing... but oh no!
i'm forced to give the money back to the insurance company for more premiums =(

what should i do? i got it!
i'll hire another massage therapist! and a
manicurist too! i use the money from my 1st massage therapist to pay for the premiums on my new therapist and
manicurist... wow... still extremely win/win for me because
i'm getting double the tax break @ the price of my first employee =)
i'll never have to pay for another
COI again... as my employees die, the insurance company gives me money to take out more
COIs... so i end up with lots of fun tax breaks...
eh... so anyway... that's what
i've found in my research of "dead peasant insurance", (
btw, in
lawrence's blog he talks about where he thinks that term was coined)
i think it sucks... even when employees are fully aware that they're are allowing their jobs to do this... i think there is a moral line that is being crossed... but this is
america, so what's new...
let me know what u think =)