Michael Moore's Capitalism, A Love Story has revealed a deep dark secret - so-called Dead Peasant Insurance, the practice of companies taking out secret life insurance policies on their low-level employees, with the benefits paid out to the company upon the employee's death, even if they no longer work at the company. Sounds pretty feudal, even ghoulish, doesn't it? With a very fitting feudal name!
The Wall Street Journal found that numerous corporations purchase such policies on millions of employees, typically without their knowledge. The business is thriving, with premiums growing from $1.5 billion in 2000 to $2.8 billion in 2001. Insurance executives maintain that such policies are "perfectly legal." Among the many hundreds of corporations that have bought such insurance, nicknamed "dead peasant" insurance, are AT&T, Dow Chemical, Nestle USA, Procter & Gamble, Walt Disney and Wal-Mart. In fact, so many companies have them that US Representative Gene Green, a Democrat from Houston, has been attempting to pass a law making it illegal to keep the policies secret.
And what a wonderful corporate tax dodge it is as premiums are tax-deductible and the resulting insurance payouts are tax-exempt! The corporations can even borrow against these policies and the interest paid is also tax-deductible!
These days "Only in America" usually means "Coming Soon to Australia", so if you have been wondering why your company is still keeping you on, now you know it:
Of course, I've always known this about some of my past co-workers!
