'Dead peasants' insurance pays your employer a secret, tax-free windfall when you die.
Right now, your company could have a life insurance policy on you that you know nothing about. When you die -- perhaps years after you leave your employer -- the tax-free proceeds from this policy wouldn't go to your family. The money would go to the company.
Whats more, the company might use this policy to pay for retirement benefits and other perks not for you or your fellow workers, but for your companys top executives. This policy is being paid for by a tax break given to employers! http://www.youtube.com/watch?v=-cLrXYmUurE
Sound outrageous? Such corporate-owned life insurance is also big business:
Companies pay a whopping $8 billion in premiums each year for such coverage, according to the American Council of Life Insurers, a trade group.
The policies make up more than 20% of the all the life insurance sold each year.
Companies expect to reap more than $9 billion in tax breaks from these policies over the next five years. The policies are treated as whole life policies. So, companies can borrow against the policies (though the IRS won't let them write off the interest). And the death benefits are tax-free.
Hundreds of companies -- including Dow Chemical, Procter & Gamble, Wal-Mart, Walt Disney and Winn-Dixie -- have purchased this insurance on more than 6 million rank-and-file workers. http://www.youtube.com/watch?v=t4ZdgIk8f_o&feature=player_em... The following companies, however, are believed to have been named as the beneficiary of life insurance policies on employees:
ADAC Laboratories
Advanced Telecommunication Corp.
Aeroquip Vickers Inc.
Alabama Power Co.
Alfa Corp.
Allegheny Technologies Inc.
Allergan Inc.
Allfirst Financial Inc.
American Business Products, Inc.
American Electric Power
American Express Co.
American Greetings Corp.
American Management Systems Inc.
American Seafoods Group LLC
Ameritech Corp.
Amerus Group Co.
Anadarko Petroleum Corporation
Appalachian Power Co.
Arch Chemical
Aristech Chemical Corp.
AT&T Communications
Atlantic Richfield Co.
Avery Dennison Corp
Avon Products Inc.
B. F. Goodrich Company
Ball Corporation
Bank Boston
Bank Of America
Bank One Corp.
Barnett Banks Inc.
Bassett Furniture Industries Inc.
Be Aerospace Inc.
Bear Stearns Companies
Bellsouth Corporation
Boise Cascade Corp.
Boston Company
Boston Federal
Bristol-Myers Squibb Company
Camelot Music, Inc.
Carolina Power & Light Co.
Carpenter Technology Corp.
Catskill Financial Corp.
Central Power & Light Co.
Ch2m Hill Companies Ltd.
Charming Shoppes, Inc.
Checkfree Corp.
Chemical Banking Corporation
Citibank, N.A.
Citizens Bank
Clark Inc.
Clorox Company
CNF Inc.
Coca-Cola Company
Columbus Southern Power Co.
Commercial Intertech Corp.
Compass Bank (Florida & Alabama)
Computer Technology Associates Inc.
Consolidated Natural Gas Co.
Consolidated Rail Corporation
Cox Enterprises, Inc.
CTA Inc.
Cymer Inc.
Diamond Shamrock Inc.
Diebold Inc.
Dime Bancorp Inc.
Dow Chemical
Earle M. Jorgensen Co.
Eastman Kodak Company
Eaton Corp.
ECC Capital Corp.
Enserch Corp.
F&M Bancorp
FiberMark Inc.
Figgie International Inc.
Fina Oil & Chemical Company
First Bank System Inc.
First Commonwealth
First Midwest Bancorp Inc.
Fleet Bank
FleetBoston Financial Corp.
Flightsafety International Inc.
Frontier Bank
Fulton Financial Corp.
GATX Corporation
Georgia Power Co.
GNC Corp.
Great Plains Energy Inc.
GTE Corporation
Gulf Power Co.
HCR Manor Care Inc
Hechinger Company
Heritage Commerce Corp.
Herman Miller Inc.
Hershey Foods Corporation
Hillenbrand Industries, Inc.
Hosiery Corporation of America
Houghton Mifflin
Household Finance
Hovnanian Enterprises Inc.
Hughes Supply Inc
ICI Americas, Inc.
Idaho Power Company
IKON Office Solutions Inc.
Indiana Michigan Power Co.
Integra Bank Corp.
Intermark Inc.
Iowa First Bancshares Corp.
Iroquois Bancorp Inc.
J Jill Group Inc.
JP Morgan Chase & Co.
Kansas City Power & Light
Kansas Gas & Electric Co.
Keithley Instruments Inc.
Kentucky Power Co.
Keycorp Ohio
Kimberly Clark
Korn Ferry International
Laser Master Int’l. Inc.
Linens N Things Inc.
LKQ Corp.
Louisiana Pacific Corp.
Manor Care Inc.
Marriott International Inc.
McDonnell Douglas Corp.
Media General Inc.
Medicalcontrol Inc.
Menasha Corporation
MidAmerican Energy Co.
Miix Group Inc.
Mississippi Power Co.
MNC Financial Inc.
Mueller Industries Inc.
National City Corporation
NationsBank
Nestle Enterprises
Norfolk Southern Corp.
Norfolk Southern Railway Co.
Northern States Power Co.
Ohio Power Co.
Old National
Olin Corporation
Owens & Minor Inc.
PacifiCorp
Panera Bread Co.
Panhandle Eastern Pipe Line Company
Parker Hannifin Corp.
Penn Treaty American Corp.
Penns Woods Bancorp Inc.
Phibro Animal Health Corp.
Philipp Brothers Chemicals Inc.
Phoenix Companies Inc.
Pinnacle Financial Services Inc.
Portland General Electric
Potlatch Corporation
PPG Industries
Procter & Gamble Company
PSS World Medical Inc.
Public Service Co. of New Mexico
Public Service Co. of Oklahoma
Public Service Enterprise Group
Questech Inc.
R. R. Donnelley & Sons Company
Ruddick Corp.
Ryder System Inc.
Sallie Mae (Stud Ln Mktg Assoc.)
Savannah Electric & Power Co.
Sequa Corp.
Service Merchandise Co., Inc.
Shearson Mortgage
Sherwin-Williams
Sky Chefs
Smart & Final Inc.
Smith Barney
Sonoco Products Co.
Southwest Bank
Southwest Water Co.
Southwestern Bell Corp.
Southwestern Electric Power Co.
Southwestern Public Service Co.
Star Banc Corp.
Stauffer Management Company
Steelcase Inc.
Sturgis Bancorp Inc.
Summit Bank of N.J.
Swank, Inc.
Tellabs Inc.
Tenet Healthcare Corp.
Texas Eastern Transmission Corp.
Tompkins Trustco Inc.
TXU Corp.
TYCO International
UniFirst Corp.
Union Bank
United National Bancorp
Urocor Inc.
Vineyard National Bancorp
W. R. Grace & Company
Wachovia Corporation
Walgreen Company
Wal-Mart Stores
Walt Disney
Wang’s International, Inc.
Wells Fargo, N.A.
West Coast Bancorp
West Texas Utilities Co.
Westar Energy Inc.
Western Aire Chef Inc
Western Resources, Inc.
Westpoint Pepperell
Winn Dixie
Winnebago Industries Inc.
Woolworth Corporation
Xcel Energy Inc.
York Water Co.
Zale Corp.
thanks Thundercloud
Insurance Policy
Part of the benefits provided by my employer is a life insurance policy. It is 1.5x my salary.
I think that most of these polices are similar concept. As with everything in life I am sure there some business that do this and do not porvide it to the employees.
In liberty,
rn
Liberty = Responsibility
Can we take out insurance policies on our employers?
If not, why not?
BTW: This kind of insurance leads to massive agism.
agism?
agism?
“Defiance of God’s Law will eventually bring havoc to a society.” - Dr. Ron Paul
Lucky You!
You stumbled on a very valuable tool to starve the tax beast. You too can employ this same instrument to grow your wealth and the wealth of your family.
TAX FREE
Check out http://www.bankonyourself.com/
Let me ask you a few questions...
1. If you die will your IRA/401k give your heirs a tax free death benefit?
2. If you use an IRA/401k and you don't need the money for living expenses at retirement age can you let it continue to grow without touching it?
3. Do you like having the IRS in your business telling you what you can and cannot do with your wealth?
4. If you need a loan, would you rather borrow it from your own private 'bank' where you set the terms or from another bank (Federal Reserve whore)that charges you interest and only allows you to borrow if you pass their credit test?
5. Here's the best part... If you employ whole life insurance policy that has a 'non-direct recognition' feature you can borrow from your equity (tax free) and still be paid a contractually guaranteed dividend on your policy as if you did not borrow from the equity. You get to use your money AND get a dividend on it simultaneously.
6. When you do retire and want to take money from your stash would you rather pay the IRS (taxes aren't going down) or borrow your own money from your own 'bank' TAX FREE?
Don't listen to these MSM ignorants when they act as if they just discovered some conspiracy. They're stupid.
Don't be stupid.
Whole life, dividend paying, mutually held companies, using non-direct recognition, with a (PUAR)paid up additions rider.... is the least IRS controlled instrument for managing capital and growing wealth.
Congratulations. You just stumbled onto what 'smart money' has done for over a hundred years. You now can graduate from being one of the financially, dumbed down masses.
"GINO" = Government In Name Only
Updated with abc news video
Creepy is the word. One other problem is that since the corporations have established a black market economy if you will. The incentive is to let employees sign the insurance thinking it is legit, and let them go over any small problem to bring in more potential policies.
If voting could really change things,
it would be illegal. Here is hoping for change!
Obviously YOUR not a business
Obviously YOUR not a business owner, those life policies are common place. Not only am I one of the oldest poster's here, I happen to be an insurance broker, and I sell businesses those policies.
IMAGINE THIS!
you own a business, and you have an employee you would like to keep OR that employee is so VALUABLE to your small business that if they died, business profits would be off for months.
THATS why you take out a "key-man" policy.
NO! not every business does this or can even afford this. Since most small businesses are not C-corps, they then cannot take the premium they spend as a tax write-off. But they get the proceeds tax-free.
IF YOU DIE, YOUR WIFE GETS THE MONEY THE SAME WAY TAX-FREE.
Personally I think your a tard, you put this up on a dailypaul forum which has no business being here in the first place. I am guessing you are very young, DONT OWN YOUR OWN BUSINESS, and probably half way done with college (if your lucky).
+1
+1
“Defiance of God’s Law will eventually bring havoc to a society.” - Dr. Ron Paul
Going out of your way to insult me, aren't you.
Are you having a bad day newbie?
If voting could really change things,
it would be illegal. Here is hoping for change!
to be honest your post
to be honest your post boarders on jealousy and socialistic mind set. Who cares what the Company does. It is not illegal. Who cares if the Company uses pretax money to buy these policies. That is just a few less dollars the idiots in DC have to run their empire. I see nothing wrong with doing this. Its like gee I died but the money went to the company I work for so I(my dependants) should get the money from the insurance even tho I didn't pay the premiums. And your argument below that a Company buys these policies and then sends workers to do dangerous jobs is BS.. OSHA is all over employers and safety. The employee can turn in their own employer if the employee feels they are being forced to work in an unsafe work environment. That dog just don't hunt. Like the poster said above You are young, don't own your own business and don't have a clue. Before you call me newbie I have been here for 3 years with 2 other names.
“Defiance of God’s Law will eventually bring havoc to a society.” - Dr. Ron Paul
Don't be too hard on him
Yes, this is a pretty common, benign corporate activity.
But it is shocking to people when they first find out about it. It really seems like the company has a vested interest in your death. It isn't hard to imagine them setting up 'accidents' to cash in on a few insurance policies. Expect to see stories of companies providing polluted water, polluted air, electrical disturbances, bad carpet to employees expressly to shorten their lives (why do you think those vending machines and coffee machines are there?).
Also, insurance is, IMHO, a form of gambling and generally has grim intention...thus, ultimately bad business. And there is just way too much gambling in the corporate world...and grim intentions leads to self-fulfilling environments. This insurance is one of the reasons why the corporate culture treats employees like 'human resources'...a dehumanizing process which leads to an immature, immoral decision culture amongst employers.
It is especially unnerving when companies take insurance out on employees that easily replacable. You know they are straight up gambling in these cases and the house wins because the house sets the odds. So if people at your company are developing cancer and other diseases left and right, find another place to work immediately.
And if THEY ( the corps ) die first...
all the riches pilfridged from the people will return.
Discover Costa Rica
how are riches being pilfered
how are riches being pilfered from the people with this life insurance policy? You sound like Stalin, or Castro..
“Defiance of God’s Law will eventually bring havoc to a society.” - Dr. Ron Paul
Three Legitimate Reasons for Life Insurance
There are legitimate reasons why a company might buy life insurance on an employee. I have first hand experience with these as a small business owner.
1. To cover a loss in case a key person dies. What would Apple be without Steve Jobs? I don't know, but I'll bet Apple has a large policy on him to help cover some of the costs of not having him. Company is beneficiary.
2. To reward key people. One of the problems with rewarding people with benefits is we have socialist statutes that say all employees must be treated equally. Life insurance is a loop hole and can be used to fund retirement without the restrictions of a 401k. This is a way to reward your best producers and encourage them to stay. Spouse generally beneficiary.
3. To make sure when your business partner dies, you can cover the price of buying his stock to pay off his spouse. A good idea if you have more than one owner in a closely held company is to have an agreement on how stock will be sold back to the company should a partner die. This is done because the surviving partner doesn't want some spouse with no experience, coming in and changing the company for the worse. The contract will have a forced sale/purchase upon death clause and a method for calculating the value. Company is beneficiary.
Dead Peasants Insurance
I don't believe this thread helps the cause, as it is factually wrong in too many respects. (Do we really regard Michael Moore as a credible source?)
Here are the problems:
1. This stuff was effectively killed in 1997 or thereabouts. The courts killed it by denying the tax benefits to Winn-Dixie, and Congress killed it legislatively. Some banks still use it, but that long list is just historical. (I get that the post is written in the past tense, but the implication seems to be that this is an ongoing problem.)
2. These large programs were "experience-rated," which is insurance-speak for the fact that no mortality gains went to the company. No "windfall" occurred on an employee's death, tax-free or otherwise. All of the benefits came from tax advantages that turned out not to exist. (Really, what insurance company would sell 300,000 policies to one owner if it thought the owner would actually make money on the mortality bet?)
3. Money is fungible. The money made from these tax plans, while they lasted, was, by the very nature of money, used to fund whatever the company in its unfettered liberty chose to fund. The idea that it was used for any given purpose is just silly.
I like to think that I'm a libertarian, but I'm not a torch and pitchfork populist. And, unfortuntely, I actually know how this stuff worked because I helped to sell it. I know it was a tax play, and I know it was aggressive, and I'm not uncomfortable with the notion that the Code never should have appeared to make it possible. But it was only as bad as it was, and it's yesterday's news. And misdescribing it merely calls into question the bona fides or due diligence of the this site.
Lawrence J. Kramer
Be Your Own Banker
This isn't wrong, it is in the companies interest to do this. You can take out these same policies on people you have an interest in... Business partners, relatives, or children. You can then loan against the cash value of the policy and pay yourself interest.
Nelson Nash, is an Austrian economist guy who is a member of the Mises Institute, and he wrote "Be Your Own Banker"...
It is an amazing book showing you how to use these whole life dividend paying insurance policies to avoid using cash, cds, or bank loans to finance your business or private things.
I highly recommend it.
there is nothing wrong with this ... you can buy it too. These insurance policies pre-date the income tax, and are exempt... also they are very sound, they are only really invested in very conservative real estate and building projects.
(reply to rebelsoul below)
Yes, I agree, a bit of a rant when I see long lists.
Banks, medical, energy, finance make up this list.
Why would you not suspect manipulation and fraud?
If the average citizen was given "bailout" money, let's say I recieved 5 million dollars, then I suppose I could insure every family member, including the future potential earning power of an infant.
Since I've got the money, I could in fact purchase insurance, use the right offs, and profit.
Now, is this not like derivitives, and a fast money game that excludes this profit taking from the public?
There is fast money, and slow money.
You bring up a very good point . . . that this kind of "money game" could work it's way into the public's
"slow money mentality" (not having unlimited money and teflon liability) and blend insurance with network marketing, which could allow an affordable entry,
and a more "grass roots" approach to "investment".
And never forget, “Humans, despite our artistic pretensions, our sophistication and many accomplishments, owe the fact of our existence to a six-inch layer of topsoil and the fact that it rains.”
I do not understand the point the article is trying to make
it says "Companies pay a whopping $8 billion in premiums each year" but they only make "Companies expect to reap more than $9 billion in tax breaks from these policies over the next five years."
So they spend 8 billion a year to make 9 billion in 5. In the same time frame they are going to spend 40 billion to make 9 billion.
This is not adding up.
It was all done with mirrors
The $8B in premiums were "paid" by policy loans and withdrawal of policy values. The whole thing could be done with virtually zero cash outflow. But the $40B gain was in real money (at least until the IRS denied the tax gains).
Lawrence J. Kramer
doctor011
Your thread seems to have confused some folks, but we can safely assume that they were confused before you posted.
if the business buys the
if the business buys the insurance and pays the premium, who cares?
“Defiance of God’s Law will eventually bring havoc to a society.” - Dr. Ron Paul
Yea who needs to make a profit
Just hire old and sick people. Better yet create a hazardous work environment . Am I the only that sees a conflict in interest?
If voting could really change things,
it would be illegal. Here is hoping for change!
there is no conflict of
there is no conflict of interest. show where the conflict of interest is?
“Defiance of God’s Law will eventually bring havoc to a society.” - Dr. Ron Paul
Seriously, if some life
Seriously, if some life insurer sell policies on old, sick people working hazardous jobs.... hey, it's their problem.
Karl Denninger often rants about naked CDS contracts creating similar conflicts of interest, and about how it is illegal to buy fire insurance on your neighbor's house, because it may create perverse incentives.
I don't know if he's right that this currently is illegal, but even if it is, it really isn't something government ought to be involved in. Insurance Cos selling policies that the buyer with only little trouble can cause to pay out, really won't be around for very long. Absent government intervention, this is a rather quickly self correcting problem.
The problem with CDS' is, of course, that the government, and the Fed, did step in, and made tax payers (hopefully Chinese ones :) ) pick up the tab. But that's the problem that needs attacking, not the existence of the insurance policies themselves.
no, you are not--
something feels insidious about this--
thank you for the read--
it's hard to be awake; it's easier to dream--
Useful info. Hope to see more
Useful info. Hope to see more good posts in the future.
loans for people with bad credit
natural gas
Awesome post! Interesting info to know
natural gas
your reaching on that 1...
your reaching on that 1... hell why don't you take out a policy on all the bosses.. then you can reap the reward.. hazardous work environment? sticking yourself with a paper clip or something? What I see in this article is sour grapes.. someone expects the company to buy the insurance and then give the benefits away to that person or his family... somebody wanting something for nothing.
“Defiance of God’s Law will eventually bring havoc to a society.” - Dr. Ron Paul
Man that is really ignorant
So in your world the bosses are in the shop working with the chemicals. Inhaling the dust from the heavy truck asbestos brake linings that by the way are still legal. But still cause cancer. As far as the clip goes, is the fact that she is greedy all you can see. I believe you have become acclimated to this crap.
If voting could really change things,
it would be illegal. Here is hoping for change!
nobody is forced to work in
nobody is forced to work in any shop hazardous or not..
its called freedom.. dingbats like you think that those dollars should be given to a corrupt government in the form of taxation instead of used in the private sector.
You think you have claim to those tax dollars? Why do you think Ron Paul wants to eliminate taxes and the IRS.. You make it sound like Americans are forced to work and live where they do.. what a joke.
“Defiance of God’s Law will eventually bring havoc to a society.” - Dr. Ron Paul
Ding bat,,,,,Taxes,,,,,IRS
Are you off your prosaic again ? You don't have a clue what I am about. And your Schizophrenic ramblings are very telling. P.S. you don't have a pilots license do you? LOL
If voting could really change things,
it would be illegal. Here is hoping for change!