The Californian daily Orange County Register recently stirred up opinion by reviving the topic of “Corporate-Owned Life Insurance”.
Also called “dead peasant” or “dead janitor” insurance, this type of policy has existed since at least the 1950s and is commonly offered by insurers who explain that they cover a risk that is as common as any other, so that the company’s activities can continue in case of death. Designed for business owners, their partners and key employees, these insurance policies allow the company paying the premiums to insure against the death of an employee. Without getting into the technicalities of insurers and to avoid any paranoia, it can be imagined that these contracts are strictly supervised and that workplace safety conditions are especially well respected!
So, depending on the initial investment and the risk of the person dying soon or not, depending on their age and sex, upon the death of one of its employees a company could receive a sum which could vary from some tens of thousands of dollars to much more…
The most virulent opponents of this practise point the finger at a method for companies to make money without doing anything.
And some go further by denouncing outright insurance policies taken out on employees from whom they have not obtained consent, and in a widespread manner.
Although there are no official data on companies who are beneficiaries for life insurance policies on their employees, the following list (McClanahan Myers Espey LLP) nonetheless includes some companies that are most likely to do so: http://deadpeasantinsurance.com/which-employers-bought-policies-on-the-lives-of-employees