Does your boss want you dead?

Dead peasants’ insurance pays your employer a secret, tax-free windfall when you die. Insurers have sold millions of policies to companies such as Dow Chemical.

By Liz Pulliam Weston

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 wouldnt 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.

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.

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SOURCE

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