I saw the new Michael Moore movie, this weekend. I know some of you are rolling your eyes. You either like Michael Moore or you don’t — and I happen to like his films because I always learn something new.
[I'm also a nazi fascist liberal communist feminist homosexual pervert in the eyes of some readers. You guys can stop reading right now.]
Here’s what I learned from his new movie.
- Did you know that your employer might have a life insurance policy on you? It’s known as Dead Peasant insurance because, well, you’re just a dead peasant in your company’s eyes. The loss of your life impacts the organization’s productivity. They deserve a payout, don’t they?
- How do you know if your employer has purchased a dead peasant policy? You don’t. Here are a list of employers who may have purchased a policy on your life.
- Can you make a claim and get some of that money if your loved one died? Shoot, I don’t know.
The weird thing is that I’ve never had a conversation with any HR Professional about Dead Peasants Insurance — and I’ve worked with SVPs of HR, Chief HR Officers, and VPs of Benefits and Total Rewards. No one talks about these policies. Is it because HR doesn’t know, or is it because senior-level HR people keep quiet about these policies?
I once worked with a woman who was both the Chief Benefits Officer and the Senior Risk Management Officer of my former employer — and this sounds like something she’d cook up. It’s a perfect way to reduce medical benefits for employees, limit exposure to insurance costs and retirement expenses, and make a profit when your employee dies. There’s an incentive (shall we call it an employer mandate?) to offer sub-par health insurance, take a life insurance policy out on you, and deny your coverage when you’re sick.
“Die, already. We need to make our quarterly numbers and demonstrate shareholder value.”
Are there any Human Resources professionals have insight into the Dead Peasants policies at their companies? I want the scoop on how companies justify these policies. I want to know more about what you think, too.
- Are these policies morally right?
- Do you think it’s okay for an employer to take out a policy on your life?
- How much do you really hate Michael Moore?
Give it to me. I can take it.
{ 40 comments… read them below or add one }
Can it work in an inverse fashion? I’d love to take out insurance against aging leaders in an organization. If they shuffle free the mortal coil, that will impact me, and I should be compensated. Think what the impact will be to Apple employees if Steve Jobs should pass.
I want Dead Rex insurance, and I want it now!
A) I don’t hate Michael Moore….I don’t like him, but I don’t hate him. I find some things he says/does to be annoying, but he does have some redeeming qualities. But you have to hand it to the man, he makes you think.
B) I have never heard of a Dead Peasants Policy, but I am going to try and find out if my company does have that. We have had three employees die in the past year (one murdered, one car accident and one cancer) so I am curious to know if we received any money because of their deaths. To me, that would be creepy.
I don’t think it is right for employers to take out Dead Peasant Policies on their employees—especially if the employees don’t know about it. On the other hand…
As a benefit, we provide life insurance for all of our employees (one years pay). They don’t pay anything for it, but some people still complain about it! “Why do you get to determine how much my life is worth?”, “What if I don’t want life insurance” (says a man with an unemployed wife and four children). I don’t get it. It’s free. If you die, you won’t know the difference. Now fill out the flipping beneficiary forms so if you die—I don’t have to listen to your family bitch about who gets the money. Because that makes my skin crawl.
The conflict of interest issue is big. Anytime someone has an interest in my death I tend to be afraid. Why would I want my employer in that position?
Discussions about dead peasant cycles around ever few years. I remembering it being a big topic about 7 -8 years ago. One of previous employers did it.
They primarily took the policies out on high level employees (usually jr executives and above) or employees with hard to replace specialized duties. The values of the policy would not be enough to materially affect the company’s earnings. Rather the insurance proceeds were expected to cover the business continuity expenses (e.g. executive headhunter fees, contractor fees) created by the employee’s death.
Also, partnerships and privately held corporations will sometimes have death buy-out agreements. If a partner or partial owner dies; the partnership/corp. buys out their ownership stake rather than passing it onto their heirs. Life insurance policies are often purchased by company to cover the potential buy-out costs.
I’ve never heard of Dead Peasant insurance. We do have Key Man insurance for executives, but don’t most companies? As SalesComp said, it’s a continuity issue, particularly since we’re an employee-owned company, and the firm is obligated to buy back shares in the event of a large shareholder’s death.
I don’t know about the trade-off for sub-par health insurance. My company offers really good coverage and pays 100% of the employee premium…which is killing us since that keeps going up around 20%/year. And somehow a public health insurance plan is supposed to hurt businesses? HOW? What is more harmful to business than an expense that jumps 20% a year? But I digress.
I don’t like Michael Moore. I think he raises really important issues, but he just annoys me. I agree with him most of the time, but I still have to turn him off.
I want to know who benefits from my death. Ideally I want a say in who benefits, but if nothing else I want to know who has my “worst interests” at heart.
I should add: In the past, the policies were used as a tax shelter. The company expense the premiums. They would borrow to fund the premiums and expense the interest. Then the company could claim the insurance revenue tax free. About 10 years ago the IRS started attacking these policies as tax-shelters. The tax codes were updated over the next several years. The mid 80’s to the mid 90’s was the peak for the secret company-wide policy.
The Wal-mart policies referenced in the movie were issued over 14 years ago and were canceled in 2000.
I saw the movie as well— and I like the fact that MM isn’t denouncing Capitalism– he’s denouncing the avarice, greed and abuse that individuals bestow on “free market” economics– therefore creating social outcry for reform, which the “fiscally responsible” conservatives like to call socialism, Marxist Communism. They’re thier own worst enemy— yet they scream to keep the “free markets” open in order to perpetuate thier wonton lust for money. It’s a never ending cycle untill it’s stopped– and hopefully will be stopped by the likes of MM and other’s (Obama?) that can stand up to these corporate raiders.
Taking out 1.5 million dollar insurance policies on employees when there’s plenty of available talent, with the exuse of “lost productivity” is immoral. It’s a pure example of corporate greed gone amuck.
A) Hate Michael Moore, mostly because his movies seem to be more about him than the topics they ostensibly discuss. He always seems to simplify things in order to make his point. In short: shoddy and self-centered.
B) Dead peasant policies are a great way to generate reactions, but as commentors have described above, they were mostly tax shelters and are mostly gone. Besides, the whole “I should get a piece of that money” argument is bullshit. If you don’t take the policy out, and you don’t make the payments to keep that policy going, you don’t deserve a piece of the payout. That’s the way insurance works. Any discussion about how f’ed up insurance is in general is welcome – and I’ll most likely agree with any and all points – but in this case it really is as simple as that.
I also have to wonder how much of this due to the naming convention. Key Man Insurance policies have been around forever and no one complains about them. No one wants to be a Dead Peasant though.
Key man (“person”) insurance policies for those who don’t deal with them: http://en.wikipedia.org/wiki/Key_person_insurance
@Puf You can’t take out a policy on anyone unrelated to you because you’d have a vested interest in seeing that person dead. You can, however, go to Vegas and bet on celebrity deaths. That’s awesome.
@InkedHR I’ve always worked for companies that offer life insurance policies and I’ve always been annoyed when people walk into my office and want to remove their spouses from the policies. First of all, don’t be a shitty husband. (It’s always men.) Second of all, what would your wife think of that? Third of all, you can’t.
@David T. I’m beginning to think that life is one, big conflict of interest. Everyone is getting in the way of my happiness and wealth.
@Sales You’re so right about the tax issues & the prominance of this issue in the media. I’m finding articles dating back through the 90s. I think key man & partnership coverage are fine, and coverage for executives who live/work abroad are okay, too. (“Proof of Life.”) There is risk to business continuity if an important dude dies. The guy who works in your accounting office? Well, I dunno, does your entire business rest on his life? If it does, maybe you should pay him more and promote him.
@H.Aria 20%? Shoot, that’s alot. PS — I kind of like Michael Moore because he reminds me of the other Midwestern guys in my family. Big, kind of dumpy in his clothing choices, totally harmless. Except Michael Moore is one helluva smart guy for coming out of Flint. Must be the Catholic schools.
@George I’m not benefiting from your death. Does that make you feel better?
@SalesComp I didn’t know the Walmart thing was 14 yrs old. I did see that sad family, though, who lost a 26 yr old mother and struggled with medical bills and debt while Walmart received $81K (I believe) in payouts. She was a cake decorator for 18 months. Sad.
@MattyMat Thank you, agree with the greed & lust. I would add arrogance. I mean, fo’ reals, what kind of balls must you have to operate like such bullies is the (supposedly) free marketplace?
@Phillip I’ve seen every Moore film. I dunno, dude. I think his movies are about something greater than himself — although he certainly features himself prominently. I worked in the insurance industry and it’s totes fucked up. I’ll say this much: there’s a reason why I can’t take a life insurance policy out on your old grandmother. I have no right to profit from her death. I also don’t have a problem with Key Man insurance because it’s tied to business continuity. If I’m so important to my company, you can afford to pay me a higher salary, offer me executive perks, and provide transparency around Dead Peasant coverage.
I agree with Phillip- I think MM does these more for the celebrity than to shed light on a burning issue. Why did he do this movie after the fallout instead of before? The housing market alone would have been one big, glaring, neon sign pointing to “PROBLEM HERE!!” I just don’t like him so I’m probably as biased as he is. I also don’t like that he presents his films as documentaries when they’re really no more than opinion pieces put to film. That’s why his arguments are always full of holes- he leaves out certain background information to make the audience agree with his side of the story. ANYWAYS, overseas here they do the same and take out life insurance on top executives and junior-level managers. Just sayin’ that the practice isn’t limited to the US.
Linda, I’m not sure that criticizing Michael Moore for not doing a documentary on the economic collapse before it happened is particularly fair – he’s not an investigative journalist (now, maybe you should be criticizing THEM – they certainly weren’t doing that jobs at the time, either, come to think of it.)
And while Moore does tend to leap from fact to fact, you can find them backed up on his and others’ websites – his stuff is fairly well-researched. There’s a reason that he was one of the first documentarians to make it into mainstream theatres; we can argue about whether that’s good or bad, but I think it’s entirely due to his “edutainment” packaging. The rhetorical and theatrical flourishes are devices to make his message palatable, but the message themselves are nevertheless sound. A calm, deep-voiced narrator reading statistics over top of a slow pan across group photos from Wall Street charity dinners wouldn’t have had the same effect somehow, I don’t think. It’s not exaggeration to say that Moore has revolutionized documentary film-making over the past ten years.
And it’s nice to know that it’s not just US companies who have difficulty reading a moral compass – in a way it’s reassuring to know that it’s transcultural. And also? Depressing.
Michael Moore is putting the proverbial GIANT mirror in front of the American publics face— and some people just can’t stand it, that’s all. They’d rather sell out America than know what’s really going on— and dream of cashing $200,000 checks from some fantasy free market they, one day, might take advantage of— but alas, never will.
“Phillip” remarked that the whole “I should get a piece of that money” argument is bullshit.
The fact is, that it’s not bullshit, because it’s not possible for you or me or the workers in those corporations to take out dead peasant policies say, for example, on the CEO’s of any of the companies that take out such policies on their workers.
That pretty much establishes an un-leveled playing field by giving corporations a disproportionate advantage that smacks of allowing a monopoly to exist in their so-called “capitalism is good for everyone argument.”
I’ve heard of the concept, but not the label of Dead Peasants.
Resources should be insured against unexpected loss. That’s just good responsible business practice. I’m sure the MM is carrying adequate life insurance, despite his protestations against everything The Man does.
Nonprofits do this as well. I saw an ad just this past week that encouraged folks to take out life insurance policies with the NPO named as the benefactor.
Two of my employers have had life insurance policies on me, but no one ever tried to keep it a secret from me.
I never minded. My benefits package in both shops was excellent, and they paid and treated me well. Besides, I worked on complex projects worth millions–it would have been an expensive PITA for them to replace me quickly and seamlessly. I figured let them recover the headhunter, signing bonus, relocation, etc. $$, you know?
@ICANHASLINDA Well I know Moore has been working on the movie since last September. There are holes in his movies, sure, but I still like him more than most lefty filmmakers. At least he’s entertaining. I’ve seen some pretty depressing Bush War documentaries. Ugh.
@Renee The global marketplace might be scarier than America. I learned a little about reinsurance when I worked for Kemper and it was appalling. The greed? The sense of entitlement? Scary.
@MattyMat Have you read What’s a Matter with Kansas? Great book.
@Resistor Good point about the unfair playing field. Totally unfair.
@RMS Sure, you can take out a policy against losses. Are employees part of your resources? I dunno. I don’t buy it.
@Elise Shoot, you are important & awesome. I wish someone would take a life insurance policy out on me because I’m worth multimillion dollars to an organization. I guess I’ve never been that important. Boo!
“Resistor” talks about there being an uneven playing field RE: corporations. DUH. That’s like saying the sky is blue or oxygen is important. And no, you can’t take out an insurance policy on your CEO – but your CEO can’t take an insurance policy out on you, either. See, way back in late 1800’s there was a case that went to the Supreme Court, Santa Clara County v. Southern Pacific Railroad, and through either clerical error or conspiracy, corporations are considered individual entities like people – sort of. Since you are an asset to the company (a unit of production), the company can take out insurance on you much the same way as they do for their headquarters, or, say, the CEO. You can’t take an insurance policy out on Grannie because you can’t make legal claim to her in that way. Unless, of course, you start a company and make her an employee.
I don’t pretend to support this practice, mind you, but it’s important to temper outrage with understanding. The Supreme Court is currently deliberating Citizens United v FEC, and it could result in corporations, unions, and churches being able to make direct contributions to campaigns under the idea that as individual entities, they have the right to free expression. This could massively shift how things like healthcare reform, insurance regulations, and environmental policies are decided. So while Dead Peasant policies are (thankfully) mostly a thing of the past, it’s important to keep your eye on the present.
I’m a bleeding heart liberal and while I commend MM for tackling the subjects he tackles I’d like him to stop being on my side. He makes my side look bad.
@Phillip I hate the idea that anything other than a person is an individual entity. Do you know what I mean by that? It’s so creepy and seemingly un-American.
@MM I think he makes us look better than Ann Coulter makes the GOP look.
Wow. That’s not what I meant at all. In fact, I meant pretty much the opposite. That I think people tend to take these kinds of things personally, but it’s not about the person, only about the dollar amount assigned to the work he/she does. Importance vs. value. And as long as a situation is mutually beneficial, why would anyone be upset to know their employer is covering themselves against the loss of the revenue one generates and the costs they’re sure to incur getting it flowing again? Bottom line, we’re all dollar signs to an employer, and that doesn’t offend me.
You asked if we feel it’s OK for an employer to take out a policy on your life, and I answered from personal experience. I feel I didn’t make myself at all clear, and I recognize that you–and perhaps your readers–were annoyed. I apologize. It won’t happen again.
@Elise NO NO NO. I was serious. I kinda do wish I was important enough to get a policy like that. You are awesome. Seriously. No worries!
Have heard about WTMWK— but i don’t want to read it because it’ll just piss me the f*ck off!!
Let’s see???—- the “projects” my boss has me working on at the moment, thanks to the economy tanking and our giant auto industry clients laying off EVERYONE and noones hiring at the moment— would garner a policy on my life worth….. hmmmm…. about Jack Shit!
I have life insurance on my dad – does that mean i love him less? no i have it to pay the U.S. Mafia when he dies (death tax). Corporations do it for all sorts of reasons, tax included. Doesn’t mean they’re evil. Corporations are amoral (not immoral). Individuals are moral or immoral.
@Avery You can’t take a policy out on my family members, though, because there’s no relationship there. Also, the death tax is overstated and affects Monsanto (who often gets the family farm upon death) more than it impacts any real American.
The death tax is stated as it is, and it is real. http://en.wikipedia.org/wiki/Estate_tax_in_the_United_States#The_.22Death_Tax.22_neologism
It affects real people and real Americans (and Monsanto owners too). It specifically affects Americans with more than $1 million depending on the year of the death.
And you’re wrong on more facts, stranger owned life insurance is legal.
@Avery How many real Americans does it impact? Most people hate the idea of the estate tax because they HOPE to be in the tax bracket where it really matters. Also, here’s what I know about stranger-owned life insurance: http://www.estateplanninglawblawg.com/2008/04/who-knew-strangerowned-life-in.html
Hi Laurie – been out sick so I just caught your post. I am disappointed that more of your readers aren’t pissed off about this topic. Dead Peasants isn’t about “key man” coverage or executive life insurance, it’s about employer’s profiting off the chance that the baker, store manager or janitor is going to die sooner than their family hopes. It’s apalling and not something that stopped in the 80s. Also, I find it interesting that you didn’t really get a response from your HR readers about their knowledge of this…so far…you and I are both HR folks and didn’t know about it. I still think it’s a fiance/risk management thing. I think I’ll ask my EVP HR about what our company does. Thanks for the thoughtful topic.
@Avery – as someone who works in the estate planning field, there are many, MANY legal ways around the estate tax issue. And Laurie’s right: as for now, it only affects those with an estate of over $3.5 million, and as it currently stands, will go away completely in 2010.
@Phillip. There is plenty to dislike about Michael Moore and dispute about his films. I am unnerved, however, when people say they are not documentaries they are opinion pieces. ALL documentaries are opinion pieces. What does the filmmaker include in the shot, in the edit, how is the information presented etc. Everything in them comes from the subjective POV of the film maker. It’s actually a misleading name for the genre. They should be called non-fiction films.
I totally agree with you. These policies are crazy and wrong. I would never want my family to find out that the company I worked for made money off my death. Isn’t it enough that my family would be grieving over my death? Then they find out the company made maybe 1 million off my death. These insurance policies should not be allowed! No one in my family works as a janitor, by the way, but I still find it offense that the policies are named “dead peasant” or “dead janitor policies.” That is so wrong! Down with capitalism!
Ellery…you are over-reacting. Capitalism has nothing to do with companies buying dead peasant policies. Greed does. Thoughtless, heartless greed. I’ve had over a dozen employees and never once considered a dead peasant policy. Fact is, I never thought of it.
Not all capitalists are heartless & greedy. Fact is, a few bad apples give the rest of us a bad name.
I have had the opportunity to spend a lot of time in a former soviet country. The socialist leaders there were heartless for the most part. And, many of the adults I know there grew up under socialism and would now fight to keep from going back to it.
The problem with Moore’s movies is that you think you learn something from them, but you don’t.
These broad-based plans “worked” because the owners could play tax games with policy loans. When an employee died, that opportunity was lost. In addition, the insurance company adjusted its premiums to recoup any gain from the death benefit, so there was no windfall to the employer.
And “dead peasants” was actually a term a particular broker used to refer to former employees who remained insured even though they were no longer around. The usage allused to Gogol’s
“Dead Souls,” in which the main character bought the rights to dead serfs still on outdated census rolls so that he could claim to own a lot of serfs. The media and the lawyers who make their living pretending this stuff was worse than it is appropriated “dead peasants” to refer to dead employees. It doesn’t matter much, and I’m sure the bell cannot be unrung. After all, for Moore et al, any stick is good enough to beat the corporate dog. I just thought the facts might be amusing.
Sorry to give my opinion in this subject, but I just want to say, I agree with David Tinney. Here in Portugal, I think we don´t have “dead peasant´s” insurance, but I´m not sure. It´s a matter of greed.
I happen to work at Wal-Mart — the so-called future of retail, unfortunately. Here at Wal-Mart, the employer may actually work an employee to death — and what I’ve learned from the MM film is that they’d benefit from it. How would they work an employee to death? At the store where I work at, the store is told by the main office to keep it always understaffed. Despite that, we always make a profit — mainly due to location. Prior to the Christmas holidays, the store did hire temps, but then fired them all by the beginning of December — despite having made record profits on Black Friday. The store is busy round the clock — all except behind the registers. When customers complain, they take it out on the employees.
Well, a few days ago, one of the employees, an old man, was on a ladder lifting something heavy in the back storeroom. Although we’re instructed to page other employees to help with a “team-lift,” like always there were no other store employees available — most were on the front registers. To make a long story short: the old man fell down the ladder and cracked his head open. He was probably lying there for a while before anyone had a chance to walk by and see him there. Now the company stands a good chance to profit from his death…. I sincerely hope that doesn’t occur. BTW: I work in automotive and I have no other choice but climb up the tire racks to pull tires down, as we’re not given the proper ladders. In general, the storage room is so small that I have to climb over boxes to get to other boxes — hoping the boxes are stable enough. Now I’ve learned that the company may likely benefit from mishaps. Disgraceful.
Thanks to Bingo for confirming my suspicion that people really don’t care about the facts (see my 11/25 post) when the opportunity to rant arises. Walmart never made money on employee deaths (the insurance company had a deal to get those profits back), and the policies were canceled years ago when the government killed the tax break. Nevertheless, Bingo has “learned” that Walmart may benefit from employees’ deaths. Facts? We don’t need no stinkin’ facts. Right?
I’ve posted on several blogs about his matter, largely out of curiosity to see what sort of response the truth would get, and that response has been fairly uniform in the respect in that not one has said “opps.” I got a couple of “thank you for the clarifications,” but mostly I get “IF what you say is true, it’s still reprehensible” for some reason or other, or the news is simply ignored as being only one “opinion” in a sea of rage.
I think this is actually a good evolutionary response. We really can’t have people believing something just because one person says it. That’s how Chicken Little caused a panic. Yet, we have to remember that all of this noise comes from Michael Moore having himself played the Chicken Little role in this drama. So the interesting phenomenon here is really the relationship between prejudice and credulity.
“I think this is actually a good evolutionary response. We really can’t have people believing something just because one person says it.”
Good point. Your facts are wrong.
If not, then tell me in your infinite wisdom: Why exactly does WalMart put out “Dead Peasants” insurance on its employees? Supposedly there’s reasons behind so-called facts, and you provided none.
Also: Nowhere is there a record of WalMart no longer continuing on this policy as you claim.
Where do you get your information?
Years ago my boss took out a life insurance/retirement plan with my kids being beneficiary out of the goodness of his heart for me being loyal to the company.I’ve been there 32 years. He passed away 10 years ago and his son took over and doesn’t see it that way,he wants half the benefits.I didn’t agree! So he put himself as second beneficiary,still don’t agree,I think my grand-kids should get it in that case. Would like to hear some opinions on that!
Such insurance policies are morally questionable, as they are incentive to cause harm to the employee.
These policies should only be allowed if the family or immediate relative would be the main beneficiary of such a policy.
I do not hate mr Moore. He does raise a lot of issues that make some people angry because their scams and money-making schemes are revealed.
Laurie is cute. Is she married? =)