Big Companies Profit From The Deaths Of Employees – Are You Worth ...

by sentinelradio

I remember the story about Wal-Mart collecting $72,820.30 in life insurance on an employee, Karen Armatrout, who died of cancer while working at Wal-Mart.  At the time, I didn’t think to look deeper to see if this was a common practice among big corporations.

A Texas attorney, Michael D. Myers, sued Wal-Mart over the Karen Armatrout case and it was dismissed because it failed to reach the limit for a civil complaint to go before a federal judge.  However, Michael D. Myers had won a previous settlement in Oklahoma in a class action law suit brought by family members of the deceased Wal-Mart employees…..the settlement in OK was $5.1 million.¹  But, lawsuits appear to be few and far between.

But, what’s going on?  Corporations are lining their pockets off the life insurance they take out on employees who die.

Some of the companies who engage in this practice are:  Wells Fargo, Bank of America, JP Morgan Chase, Dow Chemical, Procter & Gamble, Wal-Mart, Walt Disney and Winn-Dixie.  They carry policies that amount in the BILLIONS.  “ reports that Bank of America and Wells Fargo both have $17 billion each in these life insurance policies. Chase has $11 billion.”²

To add insult to injury, the policies are nicknamed dead janitors or dead peasants insurance AND the insurance is used as a tax dodge….not to mention the benefits are used to pay bonuses to key executives.

Broad-based or janitors policies that insure rank-and-file workers. Here the purpose is basically profit. The life insurance proceeds are tax-free. The policies have an investment component that allows companies to earn tax-deferred returns while the employee is still alive. And, of course, companies can take out tax-free loans on the policies. All these gains and income are used to fund operations, pay for executive compensation or boost other benefits. SOURCE

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