Everyone knows what life insurance is. It is insurance to protect those that depend on you in the event of your early and tragic death. Your employers also depend on you, and you might not know this, but they can also take out a life insurance policy on you. Oh, and they don’t even need to tell you about it either.
Often called Dead Peasant Insurance, this insurance will protect your employer from the loss of profit if you suffer an unexpected demise. One such individual, Daniel Johnson, who died of brain cancer, generated $1.5 million for his employer.
Daniel Johnson’s wife saw none of that money. Mike Myers, an attorney who has uncovered many of these cases and helped angry relatives sue.
Many critics say that this isn’t a insurance policy meant to protect them from loss, its an investment scheme. According to the banks, there are billions of dollars worth of dead peasant policies out there.
Initially, the policy was invented to protect companies from the death of high-level decision makers and a couple crucial executives. However, the companies figured out that they could get substantial tax savings by insuring all of their lower employees.
The life insurance policies were designed to allow companies to insure a few crucial executives. Savvy companies then realized they could also get a tax break by insuring many lower-level employees.
After a few anger-filled lawsuits, it is required by law that the company must get the consent of the individual before attempting to financially benefit from their death.