Friday, October 02, 2009
Michael Moore, ABC go after corporate "dead peasant" life insurance policies on workers
On Friday, Oct. 2, ABC Good Morning America examined a claim in Michael Moore’s “Capitalism: A Love Story” that employers often buy “dead peasant” life insurance policies (it’s not “dead pheasant”) on employees, and collect in the event of the employee’s death.
It is considered ethically legitimate for companies to buy “key person” life insurance policies, as on executives, since they have an obvious insurable interest. But these policies have been taken out of ordinary rank-and-file employees and can remain in effect even after the employees leave or are laid off. The report said, “no one is harmed”, but there is obviously a “conflict of interest” and maybe a temptation.
Moore says there are tax incentives for this practice.
The ABC story is called “Is your employer betting on your death” and has the formal title “Are 'Dead Peasant' Life Insurance Policies Fair?: Corporations Often Take Out These Policies on Lower-Level Employees”, by Claire Shipman and Chris Strathmann, with link here.
Wall Street goes on to securitize these products.
I see that Moore had discussed this problem on ABC's "The View" Sept. 25.