"Dead Peasants insurance." Is your employer betting on your life expectancy?
From ABC News: Are 'Dead Peasant' Life Insurance Policies Fair?. The anchors were "stunned" to find that this is going on after watching Michael Moore's new movie, Capitalism a Love Story. Maybe Claire Shipman wouldn't be so surprised if they weren't using a documentary film maker as their research department.
Life insurance used to be rather straightforward, known for offering security to loved ones in a tough time.
So when Irma Johnson learned that her husband, Daniel, who died of brain cancer, had been insured for $1.5 million, it should have been at least a small comfort.
But she did not receive the money. His employer did.
It's one of the strangest free-market perversions that Michael Moore highlights in his latest film, "Capitalism: A Love Story."
In the corporate practice dubbed "Dead Peasants" life insurance, companies wager on employees' lives, expecting to make money when they die.
And it's pervasive, said Mike Myers, an attorney who has uncovered many of these cases and helped angry relatives sue.
"Life insurance is traditionally used to guard against the death of breadwinners. This is an investment scheme," he said.
Dozens of blue chip companies have these policies, according to Myers. But only banks are forced to reveal them, and several have billions of dollars worth of policies.
"The driving force behind it is the tax deductions," he said.
The life insurance policies were designed to allow companies to insure a few crucial executives. Savvy companies then realized they could also get a tax break by insuring many lower-level employees.
The financial scheme doesn't actually cost the employees anything, except, some say, their trust.
Betina Tillman felt shocked and deceived when a reporter from The Wall Street Journal told her that her brother, a music store cashier, was insured by his employer for $339,000 when he died, despite the fact that he no longer worked at the store.
"We were just in disbelief they were able to do it, and actually cash the policy and cash in on the policy," Tillman said.
She sued, and won. Now, the government mandates that companies obtain the consent of employees.
- bluechristyLv 71 decade agoBest Answer
It is truly Capitalism at it's worst and diabolically evil .
It is too bad that our government is actually forced to step in and police these big corporations .
- mittenLv 43 years ago
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- Anonymous1 decade ago
Wow you're just purely a Michael Moore On.
THERE NEVER WAS A FREE MARKET SYSTEM WITH HEALTH CARE
THE GOVERNEMENT RUINED THE FREE MARKET WITH MEDICARE AND MEDICAID, THEY ACTED LIKE INSURANCE COMPANIES AND SATURATED THE MARKET.
AN INSURANCE COMPANY CAN'T SELL HEALTH INSURANCE TO PEOPLE WHEN THE GOVERNMENT IS GIVING IT OUT FOR FREE, IT CORNERS THE FREE MARKET TO A SMALLER AUDIENCE. YOU'RE AN IDIOT.
How do you even site Michael Moore, he said 9/11 was an inside job, he was wrong, Bush never got impeached, you credit a dumbass.
- good guyLv 71 decade ago
rather a disgusting situation, isn't it?