Article: "Does your boss want you dead?"

[Tristan]

I came across this a few minutes ago and found it very interesting. I'm not quite sure what to think about it. To be honest, part of me is disgusted. Apparently a lot of companies have life insurance policies on their employees, but it's not what you think. These are secret policies that the employees know nothing about. In fact, the beneficiaries are not the families of said employees...the companies are. Here's a link and an excerpt below:

Source: http://moneycentral.msn.com/content/...nce/p64954.asp

Right now, your company could have a life insurance policy on you that you know nothing about. When you die -- perhaps years after you leave your employer -- the tax-free proceeds from this policy wouldn't go to your family. The money would go to the company.

Whats more, the company might use this policy to pay for retirement benefits and other perks not for you or your fellow workers, but for your company's top executives.

Sound outrageous? Such corporate-owned life insurance is also big business:

* Companies pay a whopping $8 billion in premiums each year for such coverage, according to the American Council of Life Insurers, a trade group.
* The policies make up more than 20% of the all the life insurance sold each year.
* Companies expect to reap more than $9 billion in tax breaks from these policies over the next five years. The policies are treated as whole life policies. So, companies can borrow against the policies (though the IRS won't let them write off the interest). And the death benefits are tax-free.

Hundreds of companies -- including Dow Chemical, Procter & Gamble, Wal-Mart, Walt Disney and Winn-Dixie -- have purchased this insurance on more than 6 million rank-and-file workers.

[matt]

That's certainly weird. I don't know if I'm necessarily disgusted by it.

Can anyone buy life insurance on anyone else? Could you take out life insurance policies on the executives in your company in a similar fashion?

[pochax]

That's certainly weird. I don't know if I'm necessarily disgusted by it.

Can anyone buy life insurance on anyone else? Could you take out life insurance policies on the executives in your company in a similar fashion?

you probably need their Social Security number, but other than that....yeah, i guess you could. part of the problem is the underwriting of the insured involved. how you gonna get your boss to go through that for you?

Hence the benefit of doing this through employer-sponsored plans, there really is no underwriting - it's all a big-scale thing (i assume).

Also, there do exist life settlements (Dave Ramsey calls these viaticals) where typically a whole-life insurance policy is "purchased" on someone alive by a 3rd-party (typically a company) who basically waits for you to die. For example, Joe Schmoe is a 60 year old who has a $1Million whole life policy he has been paying premiums on for many years. A life settlement company offers him $400k to take over being the beneficiary of the policy. Joe can now spend the $400k as he wishes while he is alive full well knowing that once he croaks, this company will get $1Million, income tax free. Seems morbid, but it does exist.

[4jacks]

* Companies pay a whopping $8 billion in premiums each year for such coverage, according to the American Council of Life Insurers, a trade group.
..
* Companies expect to reap more than $9 billion in tax breaks from these policies over the next five years.

In other words

* Compainies pay $8 billion a year
&
* Compainies recieve $1.8 billion a year back

Compainies is stoopid.

[matt]

I think you also have to factor in payouts companies receive from the life insurance policies.

Not to say that lots of companies aren't stupid.

[johnkeith]

really Weird
But this world is all about this is all their is get all you can

[4jacks]

I think you also have to factor in payouts companies receive from the life insurance policies.

Not to say that lots of companies aren't stupid.

I'll tell you a company that isn't stupid, the company selling this crap! Freaking genius!

[matt]

I think you also have to factor in payouts companies receive from the life insurance policies.

Not to say that lots of companies aren't stupid.

I'll tell you a company that isn't stupid, the company selling this crap! Freaking genius!

I always thought that selling death insurance was kind of a losing bet, since everyone dies...

[4jacks]

I always thought that selling death insurance was kind of a losing bet, since everyone dies...

That's just the sales pitch.

[matt]

That's just the sales pitch.

HAHHAAHAH