“Dead Peasants” Life Insurance Policies Under Scrutiny

Posted on Oct 02, 2009

According to an October 1, 2009 news article on ChicagoPublicRadio.org, Representative Luis Gutierrez (D-Chicago) introduced legislation that would ban employer-owned life insurance policies unless the employee earns at least one million dollars a year from the employer. 

Currently, countless employers purchase so called janitor or dead peasants life insurance policies without the consent of the employee despite a 2006 federal law requiring the employer to obtain such consent.  For instance, based on public filings, Bank of America owns approximately $17.4 billion dollars in life policies on its employees, and Wells Fargo owns $12.1 billion.

In Michael Moore's new film, "Capitalism: A Love Story," Moore details how employers can benefit by providing poor health insurance benefits while simultaneously collecting life insurance proceeds when employees die.  Moore claims this can be done while providing working conditions that are unsafe and result in stress related illnesses and disorders.  Employers' counter that the collection of life insurance proceeds helps offset the high cost of health insurance benefits.

To read the full article, please click below.

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