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Wise Buys Closing


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#16 asbestoshills

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Posted 27 August 2012 - 01:45 PM

Here's another example, there are many more!

Husband’s Employer Over “Dead Peasant” Insurance Policy
Published 1, February 25, 2009 Society , Torts44 Comments


Irma Johnson, a Texas widow, is suing after she was mistakingly informed that the employer of her late husband Daniel Johnson was to receive $1.6 million after his death under a practice known in the industry as a “dead peasant” insurance policy. Under this common practice, employers take out life insurance on employees and write off the payments as a business expense. They then collect a windfall when one of the “peasants” die.



The postal service triggered the lawsuit by misdirecting the check made out to Amegy Bank, her husband’s former employer.

These policies can continue for years after an employee has left an employer.

Wal-Mart was recently sued over its use of dead peasant policies of low-level employees and agreed to pay $10.4 million to the families of 380 employees. This has led to protests, including this video. The Walmart litigation was protracted and once again the company fought the lawsuit to guarantee bad press and then settled.

When a policy was written in 2001 for Daniel Johnson, he already had been diagnosed with terminal brain cancer. The project manager had undergone two brain surgeries to remove a tumor and was getting radiation treatments. He was unable to walk or talk. It appears that, while most insurance companies would laugh at individuals seeking insurance at such a medical stage, a bank can get a $1.6 million policy without difficulty.

What is particularly galling is that the bank (then Southwest Bank of Texas), criticized his job performance and demoted him. After buying a supplemental insurance policy, he was fired five months later and then died the following summer.

Here is a clip from a Walmart-Amegy corporate retreat. The key is to first insure the peasants before using them for clay pigeons.
Americans, don't just come in one color or race.

#17 SacKen

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Posted 28 August 2012 - 08:19 AM

...
What is particularly galling is that the bank (then Southwest Bank of Texas), criticized his job performance and demoted him. After buying a supplemental insurance policy, he was fired five months later and then died the following summer.
...

That doesn't make any sense. The policy is still valid even after the person no longer works for the company? I guess it is just a normal "term" policy? And when they are already terminally ill? I don't see why an insurance company would write a policy like that. It's a guaranteed loss. Either way, I agree that there's something wonky going on here.

That said, unless it is illegal, I don't fault a company for taking advantage of the rules. I'm surprised there isn't a policy available to guard against employee resignation or termination within the initial period before the ROI goes black. A good peasant takes significant time and resources to mold into a proper little worker.
"Just think of how stupid the average person is, and then realize half of them are even stupider!" -- George Carlin

#18 supermom

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Posted 28 August 2012 - 09:13 AM

I have heard of companies doing this. I believe there are many that do this. You as an individual can do this as well. You can take a policy out on anyone. As long as you can pay the premiums. The difference I think, is that large corporations are mixing their influence with their large banking solutions with their private policies that are not part of the HRO package that employees are privy to. However, as far as I know, most if not all states, have not banned corporations or companies from opening stand alone private life policies for employees- and 1) informing the employee (talk about your work killing you!) and 2) passing a law that the policy be cancelled after termination of employment or retirement.

This is a back door way of taking advantage of making money off of at-risk employment solutions of less than healthy investments.
So, Walmart is able to hire thousands of entry level job positions and employ people who more than likely have very little if any pre-history of preventative medical care. They see this as payback for all the sick days, loss of hours, etc... of employees with less than perfect health.

So, why do the Insurance companies allow this practice? Easy answer. They get a source for a constant and guaranteed check for each employee, which means they are able to branch out their investments.

A win-win for the the insurance and the company. Since the person on the insurance policy was never a beneficiary, why should their families think they are entitled to it? This is just business, after all

#19 asbestoshills

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Posted 28 August 2012 - 01:58 PM

Good points until your last sentence!!!!! WHY? Are you saying business is allowed to profit immorally off of its' poorest employees? ARE YOU KIDDING? Maybe if your employer gives you substandard health benefits, takes out a million dollar + policy on your life and your kids' life, b/c after all they are covered under your insurance, so they can have a piece of them too and give you a less than safe work environment and then not give your family a dime when you die. You must love capitalism without any checks or balances!
THESE companies can get huge policies b/c they don't go through the underwriting that you would have to. WHY would you want a company to have such a conflict of interest? Why would a company offer good health insurance to its poorest employees or even a safe work environment? Talk about a conflict of interest. Being worth more dead than alive at Walmart. How do you say it's just business?
Americans, don't just come in one color or race.

#20 supermom

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Posted 28 August 2012 - 09:10 PM

Good points until your last sentence!!!!! WHY? Are you saying business is allowed to profit immorally off of its' poorest employees? ARE YOU KIDDING? Maybe if your employer gives you substandard health benefits, takes out a million dollar + policy on your life and your kids' life, b/c after all they are covered under your insurance, so they can have a piece of them too and give you a less than safe work environment and then not give your family a dime when you die. You must love capitalism without any checks or balances!
THESE companies can get huge policies b/c they don't go through the underwriting that you would have to. WHY would you want a company to have such a conflict of interest? Why would a company offer good health insurance to its poorest employees or even a safe work environment? Talk about a conflict of interest. Being worth more dead than alive at Walmart. How do you say it's just business?


The business is not profiting immorally off of its poorest employees. The company is profiting amorally off of its most under represented employees in legal inclusivity to subjective ideals in entitlement.

#21 asbestoshills

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Posted 31 August 2012 - 02:21 PM

OMG Supermom are you a lawyer, or just play one on this forum?
You can use words such as human collateral etc as a eumphenism, but you don't fool anyone in thinking that it's a good thing to insure poor people who don't even have insurance themselves.
Americans, don't just come in one color or race.




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