1.24.2010

DOES YOUR JOB WANT U ALIVE OR DEAD?

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 =)

6 comments:

  1. Corperate America does not care about its employees. My job for instance gives us an anual BBQ to honor its low wage employees. meanwhile the Big Wigs get quarterly vacations, trips to day spas, and million dollar bonuses. I am not surprised that such companies would be involved with insurance schemes to boot. Shameful!!!

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  2. When an employee at my job dies, they will post a note on the time clock to notify his/her coworkers about the loss and then proceed to give the time, date, and location of the funeral. Beside that note lies the schedule which reads that all employees are scheduled to work that very day. A replacement is hired the following week and it is back to business as usual. We are all cogs. Replaceable cogs

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  3. yes we are... whether its tax breaks or backdoor cash, corporations will do whatever they can to make money off of us...

    i don't know if the law has changed but i know that some, if not all, of these companies would still get the insurance money or benefits even if the employee was no longer working there!

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  4. As I mentioned in another blog where you commented, the "buy more COI" thing is wrong. The policy premiums on existing policies were adjusted periodically to balance out the gains and losses. The program was never about the insurance. It was about the taxes. Why do you so desperately want to believe otherwise?

    I appreciate the healthy skepticism you show toward my posts. And thanks for the link. Your readers are free to decide for themselves whether I am full of poo.

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  5. lawrence j. kramer:
    yeah i always want people to decide for themselves... i'm not here to persuade... just want people to learn to think for themselves... and don't be offended that i said you could be full of poo... i didn't actually say you were full of shit... i was saying that i really have no way of verifying if what you were saying was true or not...

    that being said... im pretty sure in my blog i talk about the tax breaks... and that i still think its stupid... sorry if stating your side sounds like i'm trying to desperately believe something else... no, your side is not the only thing i write about, but if i wanted people to so desperately believe what michael moore put in his documentry then i would have only wrote about him in this blog... and i certainly wouldn't have mentioned you at all...

    the whole second half of this post talks about the tax breaks... as far as i'm concerned corporation heads are money hungry sharks who can't be trusted... and the fishing for tax breaks falls right into my beliefs... but hey that's just my opinion... and if you're offended by that, i don't care... because i'm entitled to my opinion... there's a lot that goes on in this world that i'm not happy with... but its not like people like you care... and trust me, i don't expect you to... again i just don't want people to so readily accept everything they are told.

    if there's something i missed or didn't understand as far as facts go, then feel free to leave a comment correcting me... that's why i also left a link to your blog... maybe i've misinterpreted something...

    i'm not gonna argue opinion... and there's no need to argue facts because facts are truth whether we like it or not...

    anyway... thank you so much for taking the time to read my blog... kinda nice to be able to hear from someone who lies in the midst of it all... i'm not being sarcastic... i always appreciate when people write in, even if its to say that i'm full of it... this is america and there's nothing i want more than to hear people say what's on their mind, ya kno?

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  6. Roxy - The thing about the tax breaks is that companies like Wal-Mart compete on low prices. If Wal-Mart had been able to get the tax benefits COLI promised, it would have surely passed them on to consumers to gain market share. Who knows, maybe YOU would have been the ultimate winner in the game.

    The desperation in your post lies in the silly story about the massage therapist. You had no reason to believe, other than your desire to do so, that the premium adjustments applied only to new policies. You just needed that to be true, so you made it up to suit your prejudices and concocted a whole psychodrama without simply asking me how it worked. All you had to do is comment on my blog and you'd have had your answer. But your pile of crap parable was just too tempting. Ignorance and prejudice are a heady brew.

    You write "if you're offended by that, i don't care." Have I said I was offended? I'm writing so that your readers will know that you are wrong about how this insurance worked and who benefited from it. If you want to insult me by stating that I'm not worth not insulting, that's your privilege; it's your blog. Sometimes, though, it's better to remain silent and be thought an ass than to speak up and remove all doubt.

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