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"dead peasant” insurance

Cowboy hat By Jim Hightower and Phillip Frazer - Sat., 6/1/02
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Wal-Mart loves its workers so much that it takes out life insurance on them. These aren’t policies that pay death benefits to the families of the deceased, however—they pay the benefit money to Wal-Mart!

These policies are known in the trade as “dead peasant” insurance, and industry lobbyists have quietly been going state to state to get legislatures to approve them. Legislative approval is necessary, since most state insurance codes (and common sense) say that a corporation has no insurable interest in the death of its rank-and-file employees.

But in today’s Brave New CorporateWorld where everything—even death—can become a commodity, there’s big money to be made by gaming the system. The insurance companies themselves reap hefty premiums from selling these policies to money-grubbing outfits like Wal-Mart, which can take out as much as $750,000 worth of insurance on a single clerk, janitor, or other employee.

For the Wal-Marts, laws are jiggered so they collect tax-free investment income on these policies while their employees are alive, then receive the life insurance payout tax-free as employees die off. This makes employees worth more dead than alive to low-wage employers.

State laws require that employees consent to having their lives corporately insured, but in Texas, for example, employees effectively can “consent” without knowing it, or can be forced to “consent” as a condition of getting hired.

Rep. Gene Green is working to stop these secret death policies. Contact his office at 202-225-1688.

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Filed Under: Corporate greed