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Forum Post: "Over My Dead Body!" We Peasants Must Revolt Against The Practice Identified In This Article: Widow Sues Late Husband’s Employer Over “Dead Peasant” Insurance Policy

Posted 2 years ago on Jan. 20, 2012, 3:36 a.m. EST by economicallydiscardedcitizen (761)
This content is user submitted and not an official statement

Widow Sues Late Husband’s Employer Over “Dead Peasant” Insurance Policy

(see article cut and pasted below)

Since I have signed a few employment agreements (containing very fine print and likely including consent to 'Dead Peasant Policies') with 3 big publicly traded companies in the past I know for a fact that 2 of them are known to practice taking out 'Dead Peasant' insurance policies on employees which means that when I die, very likely whichever obituary and county records tracking service these insurance companies use will report my demise and trigger disbursement of funds as named in the policies hence those employers will collect a similar amount on my 'Peasant Corpse' as the man identified in the below article even though I have not worked for the carrying employers for over 15 years-a great way for big publicly traded companies to 'float' and inflate their value on the backs of the corpses of us 'Dead Peasants'/'Over My Dead Body,' eh?

This has got to stop: Are there any lawyers who would consider drafting and submitting petition for legislation that would prevent this practice and require that those of us who have such policies on our heads be updated by such insurers by mail and via a searchable database along with an 'opt out' ability for policies that were taken out within the last 20 years at minimum long after we are no longer employed by the company/s whom we signed such agreements with?

From the article below, this fact is the most despicable of all that incited me to post at the moment:"These policies can continue for years after an employee has left an employer."

http://jonathanturley.org/2009/02/25/peasant-uprising-widow-sues-late-husbands-employer-over-dead-peasant-insurance-policy/

Peasant Uprising: Widow Sues Late Husband’s Employer Over “Dead Peasant” Insurance Policy Published 1, February 25, 2009 Society , Torts43 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.

For the full story, click here: http://www.chron.com/business/article/Houston-widow-sues-after-bank-profits-on-1722146.php

16 Comments

16 Comments


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[-] 2 points by Nordic (390) 2 years ago

Agreed, it's just evil shit and there HAS to be a law against it. But there's not. Which is why this issue is a perfect symbol of everything wrong with our country right now.

[-] 1 points by economicallydiscardedcitizen (761) 2 years ago

One Senator Green is behind the fight, read more here:

http://www.nahu.org/legislative/resources/crs%20COLI%20May%2010.pdf "Concerns about people “gambling” on the deaths of strangers has led to “insurable interest” laws in most states that require some possibility of financial loss as the result of an insured’s death as a prerequisite for the purchase of life insurance. Although employment has generally been accepted to fulfill the need for an insurable interest, many have expressed concern about employers holding policies on lower-paid employees and continuing to hold policies after a worker has left employment. Although the chief historical justification for the favorable tax treatment of life insurance focuses on individuals, not companies, COLI policies enjoy the same basic preferences as other life insurance. As a result, a corporation enjoys either tax-deferred or tax-free growth of funds invested in COLI plans. These tax preferences are a large reason for companies to choose COLI policies rather than simply investing the money in a more straightforward way"

[-] 2 points by beautifulworld (22101) 2 years ago

This is COLI - Corporate Owned Life Insurance. They bait employees by offering them a small free life insurance policy of say $10,000, but to get it you must allow the company to take out a life insurance policy on you for something like a multiple of pay or $100,000 or more. And, the company continues paying for the COLI until you die. Every year they do what is called a "death sweep." They check the Social Security Death Index to see if any former employees have died and they put in the claim. They pay very low rates and I believe they are tax-advantaged.

Never never take COLI. Buy your own life insurance policy. These companies are like vultures waiting for you to die.

[-] 1 points by economicallydiscardedcitizen (761) 2 years ago

Thanks for your reply. I'm trying to find a resource that will enable me to trace any COLI taken out in the past on my future corpse because I would like to opt out.

If you know of any way I may do this it would be appreciated. Meantime, here is some interesting info. I just found online:

http://www.nahu.org/legislative/resources/crs%20COLI%20May%2010.pdf "Concerns about people “gambling” on the deaths of strangers has led to “insurable interest” laws in most states that require some possibility of financial loss as the result of an insured’s death as a prerequisite for the purchase of life insurance. Although employment has generally been accepted to fulfill the need for an insurable interest, many have expressed concern about employers holding policies on lower-paid employees and continuing to hold policies after a worker has left employment. Although the chief historical justification for the favorable tax treatment of life insurance focuses on individuals, not companies, COLI policies enjoy the same basic preferences as other life insurance. As a result, a corporation enjoys either tax-deferred or tax-free growth of funds invested in COLI plans. These tax preferences are a large reason for companies to choose COLI policies rather than simply investing the money in a more straightforward way"

http://www.goinsurancerates.com/life-insurance/does-your-employer-have-a-life-insurance-policy-out-on-you/ So why hasn’t this practice been put to a stop? The IRS has been cracking down on it, scrutinizing policies that stand out as nothing more than thinly-veiled tax shelters, but many big companies continue to prevail. It’s no wonder, too, because according to MSN Money, corporate-owned life insurance is big business: •Companies pay $8 billion in premiums annually •Policies account for over 20 percent of all life insurance sold each year •It’s expected these policies will provide companies over $9 billion in tax breaks over the next five years

[-] 2 points by beautifulworld (22101) 2 years ago

Quite an unpleasantry, COLI is, isn't it? Corporate greeeeeeeed.

The best way I can think of to trace a COLI policy on your life is to call the benefit department at every place you've ever worked. Those plans are usually managed in the benefits department. Did you know that the proceeds often are used to fund other employee benefits?

As far as I know, a few of the big companies that do this type of business are ING, MetLife, and Aetna. But, if you call them, they probably won't have the information about who exactly is covered by what corporation. They would know what companies have COLI plans but I doubt the list of people (employees and former employees) would be available.

[-] 1 points by economicallydiscardedcitizen (761) 2 years ago

Thanks again!

Yes, I am aware now and thought about doing just what you recommend but since the majority of folks are unaware this is why I shared these links & quotes since a few of our politicians are concerned about it too:

http://www.nahu.org/legislative/resources/crs%20COLI%20May%2010.pdf "Concerns about people “gambling” on the deaths of strangers has led to “insurable interest” laws in most states that require some possibility of financial loss as the result of an insured’s death as a prerequisite for the purchase of life insurance. Although employment has generally been accepted to fulfill the need for an insurable interest, many have expressed concern about employers holding policies on lower-paid employees and continuing to hold policies after a worker has left employment. Although the chief historical justification for the favorable tax treatment of life insurance focuses on individuals, not companies, COLI policies enjoy the same basic preferences as other life insurance. As a result, a corporation enjoys either tax-deferred or tax-free growth of funds invested in COLI plans. These tax preferences are a large reason for companies to choose COLI policies rather than simply investing the money in a more straightforward way"

http://www.goinsurancerates.com/life-insurance/does-your-employer-have-a-life-insurance-policy-out-on-you/ So why hasn’t this practice been put to a stop? The IRS has been cracking down on it, scrutinizing policies that stand out as nothing more than thinly-veiled tax shelters, but many big companies continue to prevail. It’s no wonder, too, because according to MSN Money, corporate-owned life insurance is big business: •Companies pay $8 billion in premiums annually •Policies account for over 20 percent of all life insurance sold each year •It’s expected these policies will provide companies over $9 billion in tax breaks over the next five years

[-] 2 points by beautifulworld (22101) 2 years ago

That's great. Good luck. I hope no creepy corporations have a policy on you.

[-] 1 points by economicallydiscardedcitizen (761) 2 years ago

Me too but most likely Office Depot since they're a multi-national...

[-] 1 points by economicallydiscardedcitizen (761) 2 years ago

http://www.huffingtonpost.com/2011/08/25/rick-perry-texas-life-insurance-scheme_n_935666.html?page=2 Rick Perry Sought State Profits From Teacher Life Insurance Scheme

From the article: "Texas Teachers Retirement System (TRS), the state-operated pension fund with a tremendous database full of soon-to-be-deceased retirees who could sign off on policies for the UBS scheme. At the meeting with Gramm, then-State Insurance Commissioner Jose Montemayor was happy to bend the law. He agreed to grant a special waiver on insurance regulations that would allow the deal to go through, according to meeting notes.

"There was some worry about the legality," recalled the attendee. "[Montemayor] said 'Don't worry about it.' He could take those questions off the table as the insurance commissioner."

"I don't remember any of the details," Montemayor told HuffPost in a recent interview. He is now a principal with the Black Diamond Capital Partners private equity firm."

What can be done momentarily for those in shock over the truth of this level of corruption and greed: "Oh quaff this kind Nepenthe" -Poe "I have become comfortably numb."-Pink Floyd

[-] -2 points by muddFlapp (-108) 2 years ago

huff post is just libtard news, so that it is not news. Only Fox has the real news

[-] 2 points by GirlFriday (17435) 2 years ago

To be fair, I'm not fond of HuffPo. Faux is for the truly ignorant.

[-] 1 points by ithink (761) from York, PA 2 years ago

This is sickening.

[-] 1 points by economicallydiscardedcitizen (761) 2 years ago

Yes, in so much of big corporations of America the non-executive level employee on up is truly only a 'number,' nothing more than a plebe and so much chattel.

[-] -2 points by smartcapitalist (143) 2 years ago

The company took out the insurance, they paid for it. They reap it. It's standard practice. What's the big deal.

[-] 1 points by economicallydiscardedcitizen (761) 2 years ago

II resent being used in such a callous and class descriminatory way by being named on a COLI or so called 'Dead Peasant' policy of life insurance that is of no benefit whatsoever to my heirs.

Once we leave an employer we should have the option to be removed from such policies and to have access to information on who may have them on us.

Why should I be of benefit in this way to any employer let alone one that I am no longer affiliated with and with whom at a younger more naive time in life I may have allowed this to occur?