The news has been carrying again the information on “Dead Peasant or Dead Janitor” insurance. The corporate insuring of their employees and making of premiums way beyond the person has been employed has been around for decades.
It has been profitable for commercial banks and insurance companies have been able to conduct business by collecting the premiums under more lenient group insurance policies.
I first found out about it decades ago in the 1980s working at a bank when I read in the small print that I would get a free $10,000 life insurance policy but I was also allowing the company to get a $50,000 life insurance policy on me. I asked about it at a Human Resources meeting for our annual sign up for 401K, medical, etc and she was not aware of anything and she freaked. Word got out through the company and I think that bank may have initially not allowed the process to continue.
The benefit for big banks and companies is that the insurance proceeds paid by them help fund the retirement programs that they set up for employees or at least that is the theory behind it. I hear about widows finding out that their late husband’s insurance was only $25000 and yet the company is making $100,000 on them and legally I don’t think they have a case to stand on.
Ethically, it is a bunch of crap, of course, and depending on what is doing and working, you may want to inquire if upon your quitting the company that they no longer have an insurable interest in you.
I am not certain how to do that but at the very least you may want to draft a polite letter and send it over certified mail and leave a copy for your husband or wife or beneficiary so that they can check to see that you aren’t going to die for the benefit of a company you haven’t worked for (or gotten benefits from) for years.
I also am always puzzled what keeps companies from bumping off their elder employees to collect their insurance proceeds. Pundits have said that is a reason that stores hire elderly greeters. They don’t have to wait too long to collect their proceeds mu-ha ha.
In other news, today is the day for hitting your quarterly tax payments and I hope you have your tax returns completed if you have filed for an extension. I have seen people at this time of the year not able to afford doing their tax returns and I understand and sympathize.
I also think that if you are at a deadline it isn’t a great idea to split hairs especially if potential penalties and aggrevation look to be over several hundred dollars. Sometimes it is a lot easier to pay the money and just get it done.
Also for those of you e-mailing me about investing in gold, this is the time if you want to try and play for the “pop” where the price has a shot at going and staying up. There are holidays and celebrations in Asia (especially in India) and gold is the gift of choice. I would say another safe place to invest in is not guns, but ammunition seeing how there is an alleged “shortage” at least here in California. The truth is that people are hoarding it in fear of legislation to limit the purchase of ammo. The reality is that I think there are more important worries for government right now and money is tight everywhere. Just my thoughts on the subject.
A good play may be the raw materials that are used in ammunition since internationally they are being hoarded by nations as well in these uncertain times. Do your own research on this though, okay?
Hope you all have a great day and don’t take out any insurance on yourselves that you don’t need or you may be driving to work one day and see a laser target on your forehead!
Sep 15 2009
Also, please don’t quite go anywhere yet. Having some tax issues or tax questions? Any problems with trying to make it through the financial Depression we are in that is making you depressed? Please read on.
I am expanding my practice and taking on new tax clients. If you are interested in having somebody who is a successful businessman and tax professional with integrity review your returns discretely and see if your tax guy or gal is doing a good or goofy job, please drop me an email or post a comment with your contact information and time.
I have experience in international business, small businesses, partnerships, multi-state tax returns (they can get complicated) and anything else you can probably think of.
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Kim Isaac Greenblatt
Dead Peasant Dead Janitor Insurance