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

[rich p]

The smearing of Michael Moore that's prevalent these days smacks of big interests involved in much the same way that Richard Dawkins has a disinformation campaign against him.
Not everything he says is indisputable but much is fact.

In this particular case the "key worker" defence falls down when you see that they could fill these sort of jobs in a blink of the eye.

 

[goo_mason]

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.

I think my ex is still an insured life on my mortgage endowment policy. She has chronic pancreatitis and tells me that a very bad attack could cause multiple organ failure at any time and kill her. Should I get her off the endowment that only I have ever paid into? Since we share custody of my daughter, she has an interest in me having a roof over my daughter's head if she should die....

 

[wafflycat]

Well you live and learn!

Have checked with MrWC - who deals in such matters. As regards the example given of husband & wife, there is deemed to be an automatic insurable interest in each other, so husband can take out insurance on wife's life & wife on husband's. If they later split up, as long as the premiums are still being paid, the life insurance is valid. But obviously, if you bump-off the ex, the insurance company may just be a bit suspicious and refuse to pay out.

 

[theclaud]

The smearing of Michael Moore that's prevalent these days smacks of big interests involved in much the same way that Richard Dawkins has a disinformation campaign against him.
Not everything he says is indisputable but much is fact.

In this particular case the "key worker" defence falls down when you see that they could fill these sort of jobs in a blink of the eye.

Exactly. Companies like Wal-Mart have been determinedly de-skilling employment and rendering workers as dispensable as they possibly can. Whilst making them chant nauseating slogans about team-building and loyalty every morning.

 

[Arch]

Who's been sacked?

The bank chappie with cancer...

 

[Arch]

Oh yeh - see that one now...

I'm not sure Key Man Insurance is valid for sacked workers though. Can hardly be proved as "key" could they!

Ok, so fine, if they then don't claim when he dies, and take advantage...

 

[gavintc]

Have checked with MrWC - who deals in such matters. As regards the example given of husband & wife, there is deemed to be an automatic insurable interest in each other, so husband can take out insurance on wife's life & wife on husband's. If they later split up, as long as the premiums are still being paid, the life insurance is valid. But obviously, if you bump-off the ex, the insurance company may just be a bit suspicious and refuse to pay out.

So offering a second hand Toyota car would not be a good idea.

 

[wafflycat]

So offering a second hand Toyota car would not be a good idea.

*snork*

 

[ASC1951]

You misunderstand.

I don't see an issue with an employer spending its own money on insuring its own senior staff and keeping the insurance money if the employee dies in service. That is what key man insurance is for.

I do see an issue with sacking an employee because they become ill. You wouldn't be able to do it here, and quite rightly not.

Your extract is worded to suggest that in some way the policy belonged to the employee and has been misappropriated, which is of course quite untrue. Michael Moore is a very effective campaigner - I have seen all his films which were on general release in the UK and generally agree with his campaigns. I just don't kid myself that I am watching balanced reporting.

 

[BrumJim]

Don't quite get it.

Insurance is the art of consolidated risk. Whereas there is little chance of my house being broken into this year, there is an all-but certain chance that someone's house will. Hence I get insurance so that I can cover a big cost that is very unlikely, by an insurer for whom it is a smaller cost, but payouts are very likely, by payment of suitable premiums into a big pot.

Some things are not insurable because they are too likely. A few years ago large companies could not insure loss of computer equipment as it was so endemic that you could guarantee several break-ins a year. Company I was working for was definitely experiencing that.

So, Wal-Mart are a big company. On averages, a certain number of employees will die in service. Hence they are already consolidating their risks. And still they can take out insurance and come out in profit? Their insurers need to take a look at their business model, methinks.

 

[swee'pea99]

You misunderstand. No I don't

I don't see an issue with an employer spending its own money on insuring its own senior staff and keeping the insurance money if the employee dies in service. Nor do I. That is what key man insurance is for. Indeed.

I do see an issue with sacking an employee because they become ill. You wouldn't be able to do it here, and quite rightly not.

Your extract is worded to suggest that in some way the policy belonged to the employee and has been misappropriated, No it isn't. How is it?. which is of course quite untrue. Michael Moore is a very effective campaigner - I have seen all his films which were on general release in the UK and generally agree with his campaigns. I just don't kid myself that I am watching balanced reporting. Nor does anyone else. Which has nothing to do with the points at issue.

I have no problem with key man insurance. It is only prudent for businesses to insure themselves against the financial losses that they would incur on the death of a key man/woman. But that's not what's going on. Wal Mart are not insuring 'key men'; they are insuring 'Peasants', having run the numbers and found that, in effect, gambling on their employees' mortality is a nice little earner. As someone says above, their insurers need to get some actuaries in. That in no way mitigates the status of what strikes me as an extremely squalid practice.

As for the bank, their employee could hardly be regarded as key, given that they had decided to dispense with his services. He, again, was nothing more nor less than a potential windfall. 'Morbidly cynical' doesn't come close.

 

[trustysteed]

i just like the idea of phoning up a broker and requesting 'dead peasant insurance'

 

[GrumpyGregry]

the internet is a wonderful thing...

AP do fact checks on all sorts of things; here is what they have to say about mm, walmart and dead peasant policies....

“Fact-checking Moore’s ‘Capitalism’
By RACHEL BECK (AP) – Sep 24, 2009
NEW YORK — Despite the title of his new movie, Michael Moore really hates capitalism. He says it’s a scheme for businesses to profit at the expense of the little guy.
The provocateur filmmaker is campaigning for an end to what he says is the “evil” in our economic system and a return to the days when our lives weren’t so defined by money. It’s an ambitious theme, but some of his arguments in “Capitalism: A Love Story” fall apart on closer inspection….
___
MOORE’S TAKE: You’re better off dead — at least that’s how some companies view their workers.
THE FACTS: Moore highlights an ugly truth about insurance policies that benefit companies, not the employees, when workers die. Wal-Mart Stores Inc. is scathed for its use of such “dead peasant” policies. Moore notes how the sudden death of a 26-year-old former Wal-Mart worker resulted in a $81,000 life insurance payout to the retailer.
But it’s never mentioned in the body of the film that in 2000 the world’s largest retailer canceled all 350,000 of these policies it took out on employees between 1993 and 1995.
MOORE’S RESPONSE: No misrepresentation here, he says: Wal-Mart’s termination of the insurance policies is included in a 7-minute-long presentation of facts and quotes on different issues relating to the movie shown in the closing credits.”

It also seems that a few years back the US Congress passed a law imposing a significant tax penalty on companies buying life insurance without employee consent or on rank-and-file workers, even with their consent. various people are suing various corporations as we speak.

See blatant capitalism on the us walmart model treats people like dirt and dehumanises them, and seeks to make a profit wherever it can.

 

[mangaman]

I wonder if it's doing this in ASDA

Still, every little helps.

 

[GrumpyGregry]

are such policies even legal in uk insurance/tax law.....

it's too long since i was a practioner but iirc 10 years ago they weren't.

iirc they weren't even legal in every us State!