"Dead Peasants" Insurance!

[GO-NAD!]

http://moneycentral.msn.com/content/Insurance/P64954.asp

Is it just me, or are any of you surprised by this? How absolutely repugnant! I don't know if it happens up here in "Soviet Canuckistan" (my country's name according to Pat Robertson) - I certainly hope not! The term "morally bankrupt" comes to mind...

 

[Xargos]

Okay, now that's just totally disgusting!

I can understand why it is done, though. Most job positions require at least some time spent in training. If someone dies while employed in a position, the company will loose productivity while finding and training another person. The death doesn't allow for giving notice of the intention of leaving the company, so it doesn't allow the company time to find a replacement ahead of time.

Still, I do find it disgusting.

 

[Rickster71]

Insurance companies have been preying on the doubts and fears of people for a very long time.
You'd be surprised at what they are allowed to sell insurance on.

They & their lobbyists have vast influence over Congress. It's "Pay for Play."
PACs (Political Action Committees) run this country. Not us silly tax payers or voters.

An aside, "Soviet Canuckistan" - Pat Buchanan coined that one; not Robertson.

 

[GO-NAD!]

Insurance companies have been preying on the doubts and fears of people for a very long time.
You'd be surprised at what they are allowed to sell insurance on.

They & their lobbyists have vast influence over Congress. It's "Pay for Play."
PACs (Political Action Committees) run this country. Not us silly tax payers or voters.

An aside, "Soviet Canuckistan" - Pat Buchanan coined that one; not Robertson.

Thanks! It was a while ago and I guess I got the names mixed up. My apologies to Mr. Robertson...

 

[highfigh]

I wouldn't look at it as a company 'wanting' an employee to die but I don't know that any requirement to inform the insured has ever existed. People take out life insurance policies on their kids all the time and I seriously doubt they're informed. Why do parents do this? Does it say that they'll be comforted by money in the event that their child dies? That's more crass than insuring an employee but it can also be used later to borrow money at a low interest rate for things like college, a car or an emergency. Business partners take out policies on each other all the time. While the preferred reason is so the company can survive in the event of the death of a partner (usually smaller companies), it can be done for "other" reasons. Having the partner killed and collecting is one way to have a nice payday.

I'd ike to know how the companies got a $9000 tax break for an $8000 expense.

 

[GO-NAD!]

I wouldn't look at it as a company 'wanting' an employee to die but I don't know that any requirement to inform the insured has ever existed. People take out life insurance policies on their kids all the time and I seriously doubt they're informed. Why do parents do this? Does it say that they'll be comforted by money in the event that their child dies? That's more crass than insuring an employee but it can also be used later to borrow money at a low interest rate for things like college, a car or an emergency. Business partners take out policies on each other all the time. While the preferred reason is so the company can survive in the event of the death of a partner (usually smaller companies), it can be done for "other" reasons. Having the partner killed and collecting is one way to have a nice payday.

I'd ike to know how the companies got a $9000 tax break for an $8000 expense.

I know some people do it, but I couldn't take out a policy on my daughter. The thought gives me the creeps...

I can see a business case for policies on senior personnel in a company that could expect difficulties if it lost a key person. But on the worker bees. And, what about the continuation of policies after a person leaves a company? Where's the justification in that?

Hey, I'm all for free enterprise, an honest days pay for an honest days work, etc. As far as I'm concerned, this doesn't qualify.

 

[Xargos]

I can see a business case for policies on senior personnel in a company that could expect difficulties if it lost a key person. But on the worker bees. And, what about the continuation of policies after a person leaves a company? Where's the justification in that?

The so-called "worker bees" aren't always people that can be quickly replaced. There are plenty of lines of work where they take weeks to bring up to speed. There are also plenty of cases where senior personnel don't actually do very much and are, in reality, much less valuable to the company than the regular employees.

The continuation of a policy after a person leaves a company, on the other hand, is something for which I cannot see any justification whatsoever.

 

[GO-NAD!]

The so-called "worker bees" aren't always people that can be quickly replaced. There are plenty of lines of work where they take weeks to bring up to speed. There are also plenty of cases where senior personnel don't actually do very much and are, in reality, much less valuable to the company than the regular employees.

The continuation of a policy after a person leaves a company, on the other hand, is something for which I cannot see any justification whatsoever.

I won't argue that point - it's perfectly valid and the worker bees (Hey, I am one!) not being valuable is not the point I meant to convey. Poor choice of words on my part.

I'll put it this way: I can understand a company taking out a policy on any employee, from CEO to the lowest ranking position, if they are difficult to replace and the company would suffer serious financial difficulties as a result. Plus, the employee would have to give permission (that wasn't coerced) and his/her family is appropriately covered as well.

But, the ghist of the story, as I understand it, is that the primary motive of these policies, is profit from basically using an employee's name, with no benefit to said employee. That is sociopathic as far as I'm concerned!

 

[Xargos]

But, the ghist of the story, as I understand it, is that the primary motive of these policies, is profit from basically using an employee's name, with no benefit to said employee. That is sociopathic as far as I'm concerned!

You won't find any disagreement from me on use of these policies for these purposes being a nasty tactic. Taking advantage of people for profit is all too common these days.

I'm just pointing out that when looking at the whole picture I can see reasons that businesses might do this out of concern for losses due to potential downtime.

 

[highfigh]

I know some people do it, but I couldn't take out a policy on my daughter. The thought gives me the creeps...

I can see a business case for policies on senior personnel in a company that could expect difficulties if it lost a key person. But on the worker bees. And, what about the continuation of policies after a person leaves a company? Where's the justification in that?

Hey, I'm all for free enterprise, an honest days pay for an honest days work, etc. As far as I'm concerned, this doesn't qualify.

I think you're looking at it as 'death insurance' and any financial planner will tell you that it's more than that- it can be used as long as there's enough principal in the account, as I mentioned before.

Why continue after the employee leaves? If they didn't, the money paid out previously would be wasted. They can't just withdraw it, they won't give it to the employee and I doubt if they could take it as a credit, like a returned item at a department store.