Wednesday, January 27, 2010

Dead Peasants Insurance

I recently found out about this creepy practice that apparently accounts for a crapload of the policies sold in the states. I haven't seen the new Michael Moore film "Capitalism, a love story", but apparently there's a bit in the film about this as well. Just when you think that corporate greed can't sink any lower, here's a practice whereby companies insure their rank and file (sometimes without their knowing) and collect cash upon their death, which they keep and don't pass on to the family of the deceased. We're not talking top execs either, they also refer to this as "Janitor's Insurance".

At first I thought that it's just plain creepy to know that someone can take out a life insurance policy on you that you don't know about and collect on it when you kick off. How is this even possible? Doesn't the insurance company want to run tests on you and stuff to make sure you're not going to keel over a day after the policy kicks in? Isn't this the stuff of TV movies were one spouse takes out a million buck policy on the other and then pushes them down the stairs to collect?

Turns out in most states (I don't know about Canada), you do need to be informed on any policy taken out on you so companies force the issue when you sign an employment contract making sure it includes agreement to policies of this type.

Ridiculous. And legally whoever pays the premiums gets the money when you check out and they say where it goes: To the company of course. The real scummy part is that some of the big companies use it as a way to pay executive bonuses.

Nice... Work the employees to death to pay CEO bonuses.

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