Dead Peasant Insurance and Walmart - Fact?

[hamerfan]

I belong to another forum where a member posted the following:


This one just came in. Please explain topic 18. to me. I wanna know what that is.


1. At Wal-Mart, Americans spend $36,000,000 every hour of every day.

2. This works out to $20,928 Wal-Mart profit every minute!

3.. Wal-Mart will sell more from January 1 to St. Patrick's Day (March 17th) than Target sells all year.

4. Wal-Mart is bigger than Home Depot + Kroger + Target + Sears + Costco + K-Mart combined.

5. Wal-Mart employs 1.6 million people and is the largest private employer and most can't speak English.

6. Wal-Mart is the largest company in the history of the world.

7. Wal-Mart now sells more food than Kroger & Safeway combined, keep in mind they did this in only 15 years.

8. During this same period, 31 Supermarket chains sought bankruptcy.

9. Wal-Mart now sells more food than any other store in the world.

10. Wal-Mart has approx 3,900 stores in the USA of which 1,906 are Super Centers ; this is 1,000 more than it had 5 years ago.

11. This year, 7.2 billion different purchasing experiences will occur At a Wal-Mart store. (Earth's population is approximately 6.5 billion.)

12. 90% of all Americans live within 15 miles of a Wal-Mart.

13. The value of product for Wal-Mart passing through the port of San Diego each year is a larger sum than 93% of ALL countries Gross National Product (GNP) ......and that is only ONE port ...one way â thatâs how Wal-Mart gets it's stuff.

14. Of the 1.6 million employees, only 1.2% make a living above the poverty level.

15. Wal-Mart's head office is located and centralized in Bentonville. Due to this fact, there are more millionaires per square mile there than any place on Earth.

16. The official U.S. Government position is that Wal-Mart's prices are no lower than anyone else's when compared to a typical families weekly purchases. That's the view of the statisticians at the Bureau Of Labor Statistics (BLS) responsible for calculating the Consumer Price Index (CPI).

17. 92% of everything Wal-Mart sells comes from China. Another 4% comes from Chinese owned companies in the U.S. or in 3rd world countries.

18. Wal-Mart and MOST large companies, take out life insurance on it's employees, without their knowing. If an employee dies, ALL the insurance moneys go to the companies. i.e. An employee making $18,000 per year, dies, and the company might make as much as $1 million. Most often these moneys coming from what is commonly referred to as "Dead Peasant Life Insurance Policies", is paid out to executives as bonuses. (A common practice, unknown by the average consumer).

19. Wal-Mart now averages a "profit" (not sales) of $36 billion per year.

He's from Germany. Not sure if WM is over there or not. He specifically wants to know if #18 is fact.
This has brought quite an exchange over at the other place (unrelated to politics).
I've always considered it a fact. What I need is an absolutely reliable link to a source showing that WM and DPI is true.
Can anyone help?
Thanks very much in advance!
hamerfan

[dmr]

1. Here's some info:

http://www.commondreams.org/headlines05/1102-06.htm
Dead Peasant's Insurance

- snip -
Wal-Mart has taken out life insurance policies, known as "dead peasants" , on low-wage hourly employees that pay benefits to the company when the workers die. On top of that - before Congress began cracking down on the practice in 1996 - companies were able to take out loans against the value of these policies and enjoy a tax write-off on the interest payments.
- snip -

More at:

http://www.dailykos.com/story/2005/04/04/104291/--quot-Dead-Peasants-quot-at-Wal-Mart

http://online.wsj.com/public/resources/documents/april_19.htm

I find this disgusting.

[EC]

6. These policies even

continue after the employee leaves the employer also. So even if you are no longer working for them when you die, they collect on your death.

[truedelphi]

2. The fact that WalMart takes out life insurance on its employees was vetted

I think by "Sixty Minutes." Although it might possibly have been another similar style TV magazine. In any event, there have been Main$tream media TV reports on this FACT!

Also the top fifteen richest members of the Walton family, (the Waltons own WalMart,) have as much in terms of wealth as the bottom 43.4% of this nation! Think about that for a moment!

[tech3149]

3. Never worked for WM, never would but I've had a "Dead Peasant" policy on my butt

Believe it or not it was a small family business. Net profits were probably in the $5M range. My not being there would have probably been a crippling factor. I found out a few years into my employment that most of the key employees were covered.
I think any business would be foolish not to take that opportunity, especially a small business. Critical personnel can be the life or death of a business. Not protecting yourself from that risk is just plain stupid.
As far as WM, they would would probably be wasting their money for such coverage. The cost would far outweigh the loss to obtain and train a replacement for almost any position.

[DCKit]

4. I don't know....

Taking out a $500K policy then driving your worker to ill-health or suicide seems pretty sketchy to me.

[fleur-de-lisa]

5. Any insurance gurus out there?

Isn't the insured's signature required to enact any such policy? At least for any insured person of age? For instance, I can't take out a policy on my adult neighbor, who I know is dying of cancer, without his knowledge and consent, correct?

[djean111]

7. When I worked for one of the huge telecommunications companies,

I got a letter saying they had insured me because if I died, they would be absolutely stricken and bereft and stumbling about ineptly, especially after investing in training me. I was in IT.
Of course, they seem to be doing splendidly after sending my job to India.
Don't know if the policy is still in force; it was a long time ago.
But yeah, you could take out a policy on your neighbor if his death impacted you in a material way.

[Warpy]

8. No, it's insurance to cover the cost of locating and training

a replacement worker. A lot of companies have "dead peasant" insurance on their employees. I'm sure I've had such policies enacted on my ass, especially as a nurse. It's estimated to cost almost as much as the education did to train a green nurse right out of school.

[mbperrin]

12. You don't need their permission or knowledge. You do need to demonstrate an "insurable interest" to

the issuing company's satisfaction.

Now, it's better to have their signature for permission, because that's iron-clad. It is possible that an insurer could change their mind and challenge the insurable interest, and if they won, would only have to return premiums with some statutory interest.

OTOH, I've never heard of a company changing their mind. So let's say you get sworn statements from a certified real estate appraiser that having a person dying from cancer near your house will decrease your property value by $25,000, then the company could choose to issue a policy paid by you payable to you upon the death of your neighbor for $25,000, all without your neighbor's knowledge.

Companies generally decline this sort of thing on public figures.

[hamerfan]

9. Thanks!

Especially to dmr for the WSJ link.
It looks like a lot more corporations/companies than WM do this. Disgusting indeed.

[midnight]

10. Walmart and Insurance team up.....

[Autumn Colors]

11. Michael Moore's "Capitalism: A Love Story" talks about this

Here's the scene:

[antigop]

13. Companies do this to help offset the cost of executive compensation

The WSJ article linked to by dmr in Post #1 was co-authored by Pulitzer prize winning author Ellen Schultz:
http://online.wsj.com/public/resources/documents/april_19.htm

Ms. Schultz wrote a book called "Retirement Heist" where she details more on COLI (dead peasant) policies. Page 116:

In recent years, as the cost of salaries and benefits for executives have put huge IOUs on corporate books, companies have begun stuffing billions of dollars into new and existing life insurance contracts taken out on the lives of their employees. The insurance policies serve as pseudo pension funds for executives: companies deposit money into the contracts, which act like giant IRAs. Like an IRA, the money in the policies is allocated among investments and grows tax-free. When the employees die -- no matter how long it's been since they've left the company--the death benefits goes to the company tax-free. The primary goal, though, isn't to harvest the death benefit but to reap tax benefits and to use the investment income to offset the cost of executive obligations.

Technically, it's illegal for companies to buy life insurance on workers as a tax dodge, but companies can buy it to finance "employee benefits". This loophole was created in the 1990s when companies and life insurance lobbyists convinced lawmakers that they could use the insurance to pay for "retiree benefits." What they didn't tell Congress was that the retiree benefit they were referring to was executive deferred compensation.

Ms. Schultz goes on to explain how the accounting on all of this works.

Bottom line: Even though companies aren't supposed to get tax breaks for funding executive deferred comp and pensions, they get essentially the same tax breaks -- and accounting benefits -- by taking out life insurance on workers.

[soundsteve]

14. Corporate 'hit men'?

So... this is an old thread that I linked through to but figured i would add my two cents;

I also saw MM's film about dead peasants insurance and after reading again about it just now I cannot help but think that there is a sinister incentive for corporations subscribing to this form of insurance to actually cause employees harm.

What is preventing a corporation that is experiencing economic troubles from 'cashing in' on employee 'misfortune?';

There have been a statistically unnatural number of deaths and suicides in the banking sector of executives - ones who apparently can be linked to criminal activity from 2008 forward - in another recent article I read in the Guardian and reading about this got me wondering how many of these dead bankers had this sort of insurance against them? What a perfect crime - steal money from the public via massive fraud (CDI's) and then kill the 'middle management' who had knowledge of criminal wrongdoing and might point the finger at the top execs, all while making millions off their deaths via collection of insurance policies - that those employees might not even know were ever even taken out on them.

I wish that this didn't seem like such a real possibility but when it comes to money, and the things that people will do for large amounts of it, this seems all too possible.

We all know that there is no 'social contract' any longer with corporate America and that CEOs and executives are general clinically 'psychopaths' who will do whatever they want at whatever cost to enrich themselves - even destroying their own companies. So is it a stretch to surmise that there might be some dark forces out there being employed to 'off' employees who might be whistle blowers -- or just for the money?

Something to chew on...