Does your boss have 'Dead Peasant' insurance on you?

[swee'pea99]

"The film is certainly shocking. Early on, Moore sets out the meaning of "Dead Peasants" insurance. It turns out that Wal-Mart, a company with a revenue larger than any other in the world, bets on its workers dying, taking out life insurance policies on its 350,000 shop-floor workers without their knowledge or approval. When one of them dies, Wal-Mart claims on the policy. Not a cent of the payout, which sometimes runs to a $1m (£620,000) or more, goes to the family of the dead worker, often struggling with expensive funeral bills. Wal-Mart keeps the lot. If a worker dies, the company profits.

Wal-Mart is not alone. Moore talks to a woman whose husband died of brain cancer in 2008. He worked at a bank until it fired him because he was sick. But the bank retained a life insurance policy on the unfortunate man and cashed it in for $4.7m (£2.9m) when he died. There were gasps from the audience in a Washington cinema at that."

From an article on Michael Moore at the weekend

 

[trustysteed]

[quote name='swee'pea99']Not a cent of the payout, which sometimes runs to a $1m (£620,000) or more, goes to the family of the dead worker, often struggling with expensive funeral bills. [/QUOTE]

do the family contribute to the premium?

and why don't they have their own life insurance in place?

not quite sure why you think this is a problem? anyone can take life insurance out on anybody else.

 

[threebikesmcginty]

Company I used to work for had key worker insurance on some of us. It was to pay for cover, loss of trade, etc. should anything happen to us. If it was a bet it didn't work because last time I looked I was still alive.

I wouldn't believe too much that Michael Moore comes out with anyway as he's very selective with the information he uses.

 

[2Loose]

Is 'Capitalism: A Love Story' out yet?

Although most of his stuff is from a 'certain viewpoint', some of the practices he exposes in his films make me shudder.

 

[ASC1951]

Sorry, swee'pea, I just don't see what the issue is.

And that is assuming that Michael Moore has his facts straight. He's a polemicist with a political point to make and factual balance isn't #1 on such people's agendas.

 

[MacB]

Maybe this could be a new form of lottery, just take insurance out on random people, a really early/unexpected death would be the jackpot payout.

 

[ASC1951]

I'm not sure you can do that, MacB. IIRC you can only insure something that you have an interest in, so with life cover there has to be some family, financial or contractual relationship between the beneficiary and the life insured.

You can of course achieve the same result by buying secondhand endowment policies.

 

[MacB]

I'm not sure you can do that, MacB. IIRC you can only insure something that you have an interest in, so with life cover there has to be some family, financial or contractual relationship between the beneficiary and the life insured.

You can of course achieve the same result by buying secondhand endowment policies.

you take all the fun out of it, can't I just claim that my interest is in them dying?

 

[swee'pea99]

Sorry, swee'pea, I just don't see what the issue is.

And that is assuming that Michael Moore has his facts straight. He's a polemicist with a political point to make and factual balance isn't #1 on such people's agendas.

You amaze me! A bank takes out life insurance on an employee without his knowledge, kicks him out the door when he develops brain cancer, keeps the policy on this now ex-employee and then cashes it in when he croaks - and you don't see that as an 'issue'?

As to Michael Moore and his facts, he may be a polemicist but he's not an idiot. Do you really think he would make such claims regarding companies like Wal Mart without being absolutely certain of his ground? They'd sue him into pulp if they could. And they would, if he wasn't 100% correct.

 

[theclaud]

He's a polemicist with a political point to make and factual balance isn't #1 on such people's agendas.

And thank God for that. And what a polemicist. I think he's a wonderful film-maker, and I'm with Swee'pea on this. The whole business is cynical, immoral and rotten to the core - balls to "factual balance".

 

[wafflycat]

I'm not sure you can do that, MacB. IIRC you can only insure something that you have an interest in, so with life cover there has to be some family, financial or contractual relationship between the beneficiary and the life insured.

You can of course achieve the same result by buying secondhand endowment policies.

Certainly in the UK there has to be an 'insurable interest' in the life of the assured.

https://vault2.secured-url.com/iib/encyclopeadia_item.asp?encyclopedia_id=189#none

Hence 'key man' insurance in the UK.

But whether the situation, as described in the OP is a legitimate 'insurable interest' in UK terms, I'm not sure.

 

[Arch]

The insurance is for [potential] loss of business thats all.

But they lost his potential when they sacked him...

I have to admit, when I read the OP I thought "How dreadful" and then when I read the "so what?" posts, I thought "Oh, yeah, so what?", But I think I'm coming down on the side of dreadful - or at least, pretty shoddy. I don't suppose Walmart will ever lose business through one of their employees dying, and certainly not to the amount they might claim on a policy. Any large organisation would have to be operating pretty stupidly if the death of one employee (assuming it's not the MD or something) led to the loss of a lot of business.... If I died tomorrow, both my jobs would get still get done.

 

[GrumpyGregry]

UK insurance, in theory and iirc, cannot and should not ever put you in a better position overall/all things considered than you would be if the insured event didn't happen. That would create a 'moral hazard' which insurance law and the industry itself is not keen on. So if I flip burgers for someone for £12k pa in a roadside van my employer cannot gain £250,000 if I die riding off a roof on my MTBSO.

Insurance of this type can only cover the employer to the maximum extent of their loss, it cannot make them better off than if the loss had not occurred. In the case of some 'knowledge workers', of course, these losses could be huge. In some complex organisations where it is difficult to 'get' how it all works, for want of a better phrase, the costs of replacing someone in a key role can run to 200% or 300% or more of their total annaul cost of employment.

 

[gavintc]

I have a life policy running on my ex-wife. I decided it was a low cost and not worth cancelling when we divorced. If she dies, I get £40,000. I pay for it, I do not think she is even aware it even exists. I will certainly not be coughing up any money to her new hubby.

So, turning the original point - I do not think there is a problem with someone (a company) insuring their employees.

 

[wafflycat]

Insurable interest only has to exist at the outset of a policy.