Saturday, February 7, 2009

"Dead peasants insurance"

A few days ago I wrote about the Walmart worker who was trampled to death on Black Friday. To most it was the epitome of materialism and disregard for our fellow man. Yet as I poured over articles about the incident I found something even more alarming. Towards the end of one of the article there was a "Walmart update." It said  "One of the hottest recent discoveries by investigative journalists is the sleazy practice known as "dead peasants’ insurance," which is allegedly used by some of our best known big corporations — such as Wal-Mart and Enron. Officially called Corporate-Owned Life Insurance (COLI), this practice has been going on below the radar since the 1980s, and P&J were turned on to it by our favorite lefty in the bullpen, Dick Walton. P&J agree with Dick Walton when he says, "Just when you thought corporate America could sink no lower, you find that your imagination cannot equal that of these fiends."

If you are like me you have no idea what "dead peasants insurance is. My curiosity had been activated enough that I wanted answers. I used the wonderful invention Google to search for my answers. Within seconds of hitting enter a page popped up with more than 170,000 results. Starting at the top I began reading through pages and articles that would have me upset for hours...days even.

"Corporate-owned life insurance (COLI) is life insurance on employees' lives that is owned by the employer corporation, with benefits payable to the corporation. COLI was originally purchased on the lives of key employees and executives by a company to hedge against the financial cost of losing key employees to unexpected death, the risk of recruiting and training replacements of necessary or highly-trained personnel, or to fund corporate obligations to redeem stock upon the death of an owner. This use is commonly known as "key man" or "key person" insurance. Currently, COLI is used primarily for masses of non-key employees in order to get tax benefits, a practice known as "janitor insurance" or "dead peasant insurance". ----(WIkipedia) 

"Dead peasants insurance" or "dead janitors insurance" is insurance purchased by companies on low-level employees. This practice is generally done without the knowledge of the employee. The way the "rules" go the employer isn't required to tell the employee that they have taken out such insurance on them. Furthermore, when the employee dies, the family receives no benefit. Instead the face value of the policy goes to the company, tax-free. We are talking $100,000, $200,000, $300,000+ policies that companies are cashing in on TAX FREE. 

One particular article that I came across speculated that Walmart and other such companies hire older employees for this very reason...because they are more likely to be "profitable to the company." And here we thought that Walmart was just hiring those gray haired greeters because they are cute and friendly. 

Needless to say I was APPALLED as I read. I couldn't believe that such a thing could be legal. To read of a man getting trampled on our way to satisfy our material needs is bad enough...but this...this just makes me mad. We are all aware of how poorly our economy is right now. People we know are getting laid off or fired and we are all tightening our belts in an attempt to stay afloat. Yet here are companies who are thriving...partly due to the fact that they are benefitting from the death of our loved ones! 

I know some of you will be wary of what I have written. I'll be the first to admit that it full of emotion and pent up disdain toward Walmart in general. However, it goes far beyond that and I would challenge you to search out the answers for yourself. Look it up and see what you find.

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