Death Benefits: How Employers Profit by Buying Life Insurance on Workers

Number 19825
Subject Insurance
Source Wall Street Journal (New York)
State New York
Year 2002
Publication Date April 19, 24, 25, May 2, Oct. 11, Dec. 30
Summary A year-long investigation by the Wall Street Journal revealed that companies profited from the deaths of their employees in the September 11 terrorist attacks on the World Trade Center. "Employers have been buying life insurance on the lives of their workers -- at all levels -- with the company as the beneficiary --and, contrary to the industry's claim, many companies were still buying policies on thousands of employees at a time. The policies act like giant tax shelters, and the insurance earnings boost company income. As workers die, the death benefits bring tax-free cash to corporate treasuries. Rank-and-file employees usually have no idea that they are covered by such policies, and though managerial level employees may be aware of the coverage, they do not realize the size (of) the policies taken out on their lives. Employers often receive half a million dollars or more at their deaths, and the policies remain in force until they die -- even years after they change jobs or retire."
Pages 35
Keywords life insurance;terrorist attacks;September 11;employers;death;profit;tax-free;treasuries;beneficiary
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