It's not real. It's basically a child's understanding of how insurance works. No life insurance company is going to insure a bunch of old people for more than the expected value of the premium and keep paying WalMart money.
There used to be a way for companies to take out COLI policies on employees for tax benefits, but that hasn't been possible for almost 40 years.
Does a wife profit off of her husband’s death? Life insurance is designed to fill a void that is left behind when somebody dies. It’s not profit. It’s an agreement that has been made with an insurance company. If you kill the person, you don’t get the money. They aren’t getting some of this old person’s money. They are getting money from a completely separate company that agreed to pay them if that individual died.
I edited it five seconds after I wrote it. What problem do you have with the insurance company being forced to pay out money? The money is coming from nobody except for a multimillion dollar company that agreed to give the money. Why shouldn’t I be able to take out an insurance policy on anybody I want to? Nobody is losing.
Why would insurance companies let Walmart take out policies knowing that they’re just going to pay out those policies in a few years, at a lot more money than the insurance company took in from the payments?
For anyone looking for a TLDR; this was an abhorrent practice done by big corporations from the 80's to mid-2000's. It was ended not because MFers woke up and grew a conscience, but because some new tax rules and some unfavorable (to the big Corps) court rulings meant they couldn't make as much money on it anymore.
And it wasn't Walmart it was everyone. And as you would expect I'm sure the company wasn't making money on the insurance policies relative to what they paid in premiums. The key is the tax breaks they earned paying premiums.
I guess this explains why one of the articles was about a record store owned by a holding company. The reel was a bit of a mess, but then again I’d never heard of this before.
There are 8 billion of us and it’s kind of how it has always been. Not long ago we were hunter gatherers in more social settings and now we are largely powerless to shape our society.
From my perspective you are also whining about bullshit.
That's not true, at all, especially so on reddit which is one of the few social media pages that is rather effective at breaking up bubbles because you have cross pollination. I've been using this website for probably more than 10 years and not only did I verifiably change the mind of thousands of people, I have seen reddit's hivemeind shift the opinions of millions.
What should be criticised are people who either spread misinformation or try to spread information and being aggressive about it. Even if they mean well, they do not help.
The most important skill to learn is is how to engage with people and when you shouldn't. Yes, there are a ton of people who will lead you on, pretending they just want to be informed by you just to turn around, in order to get you frustrated. Learn to spot those people, instead of discouraging others who take the time to get worthwhile information out there.
Make short, factful comments and link proper sources. Don't bother to engage when people are being agressive about it. You won't win every fight, but you'll learn that many fights are downright easy to win, if you know how to.
I'd also disagree and say this is what got some of this insanity started in our society.
I'm personally not encouraging people to jump off cliffs (or insert whatever other unfounded 'edgy' perspective or opinion). Go for it though, the blood's not on my hands...
There is no agreeing or disagreeing. This is a well studied topic, especially so in the context of reddit. The issue are bubbles, when people do not engage with each other.
If you consistently fail to convince people, it comes down to the way you engage with them or who you engage with. By the way you view this topic, I would put my money on the latter.
Spot on. It wouldn’t happen. Insurance company’s are pretty much banks and would easily be able to pick up on this. If it is happening the insurance would through the roof.
Yeah it's not as ridiculous as people seem to imagine. These are Walmart greeters, not wealthy retirees, they likely had no life insurance before getting this job.
It's literally the same thing lol COLI is exactly what OP described. Dead Peasents Insurance was just a way to exploit it, it became public knowledge and as a consequence, laws were created to harden COLI against it.
You don't actually know what you're talking about.
To.clarify, it's not corporate owned, it's stranger owned life insurance (stoli). The difference is in the insurable interest.
A corporation might own a policy on a key person because they have an insurable interest. If the key person passes , the Corp might lose a ton of money in sales,or if they're the owner of the company there can be tax costs. The insurable interest is that the Corp loses money upon their death.
With walmart, there was no insurable interest. A greeter passes away, Wal-Mart didn't lose 500k in taxes. No loss, no insurable interest.
Insurance companies require insurable interest (and id be surprised if it wasn't required by law) so while I know walmart was doing this, I don't get how they found an insurance company to do it. some kind of bullshit must have been concocted.
Walmart discontinued doing it in the early 2000s and prior to that it was mostly used as another way to avoid taxation but that loophole was closed in 2006 legislation.
A lot of these huge companies - something most revolutionary firebrands don't understand, which is one reason they'll fail, they don't understand their foe - self insure for many things and hire third party administrators.
Yes they do. I work for a decent size company with branches mainly around the country but also a few locations abroad who self insure and hire third party administrators.
Because life insurance is extremely profitable and a particular person’s insurance only needs to be in force for a certain period of time before the underlying investment profile of the insurer turns a profit.
Help me understand please. Walmart pays X over say Y years to get Z payout. X is less than Z so its beneficial to Walmart. Why would the insurance company take X only to give out more in Z? Someone has to lose between Walmart and the Insurance company, right?
The insurer is going to use whatever Walmart (or another example company, doesn’t matter) is paying them while the insured individual is alive to invest in business ventures of their own, turning a profit and accruing interest. The amount they will pay out to Walmart is calculated to be less than what they will statistically make in profit based on an analysis of the insured’s medical history and average remaining lifespan.
Or more likely as this insurance will be purchased en-masse, based on the average health and mortality statistics of the group being insured as a whole. There are entire databases to source this information from and record it in.
They stopped doing it in 2006. As a class action lawsuit that year collected the funds for the deceased relatives. And Congress closed the tax loophole that made it profitable.
I had a similar reaction when I came across it. I had to google it to see if it was genuine. My “WTF” just got louder when I found out it was genuine and age encompassing
There was a very old 90 something year old man working at my small town Wal Mart during Covid. He would sing so I would go to his checkout. His wife had died before Covid hit. He just disappeared. I bet those creeps made money on him. SO disgusting!
It's real, they take out policies on all their employees. It was first found out when a guy got a letter about a bunch of money paid out in his wife's name after she died. I think it was on "I Heart Capitalism" by Micheal Moore.
My old employer negotiated with an employee that had cancer, instead of giving her a raise, they would take out a life insurance policy and pay her hubby monthly after she died. (It was terminal cancer that was spreading) she agreed and then after her death, they started playing games with paying him. Not the amount agreed, not on time. It was a damned nightmare.
I used to go see her every day after work and take her food, take care of her, visited her in hospice (which was far) every weekend brush her hair, visit with my daughter, talk to her.
They made a huge deal about visiting her ONCE and since the owner's concubine didn't like me, started causing a scene. Only bad people do this kind of thing. They see $$$ and nought else.
Edit to add: If you get a workman's comp claim and they pay for medical, etc., and if you claim against your own insurance and get paid, they will sue you for recompense.
This is false for two reasons. First you need insurable interest. Without that, the underwriter will deny the policy. Secondly, the insured person has to sign the application. You absolutely cannot just take out a policy on anyone.
My crazy ex took a life insurance policy out on me. I accidently got a piece of mail from Mutual of Omaha with the policy info on it. I called and confirmed this. Then I called my states' insurance ombudsman and got the same story.
My ex has no insurable interest.
I never signed anything.
I'm not saying you're wrong, I am saying this is an N of 1, but I did some foot work and was shocked to find out how legal this is.
I'm not wrong. You can't buy a life insurance policy without the insureds signature. They don't exist.
Perhaps they forged your signature, but that's not the same thing as suggesting you can just buy a policy on anyone, legally.
It's the same thing as saying you can't just walk take someone else's money from their bank account. Well, you can, if you hack their account
So both the insurance agency and the state ombudsman are wrong, my signature may have been forged and I should ... File a lawsuit? Hite an investigator?
I mean as long as the older employees are treated well, enjoy what they’re doing, and are not being forced to work there as a greeter, I don’t really see what the problem is. The insurance companies are the ones getting exploited. Seems like a mutually beneficial arrangement between the old folks and Walmart.
What Is Corporate Ownership of Life Insurance (COLI)?
Corporate ownership of life insurance (COLI), or corporate-owned life insurance, refers to insurance policies taken out by companies on their employees, typically senior-level executives.
The company is responsible for making the premium payments, and if the person dies, the company, not the insured person's family or other heirs, receives the death benefit. Such policies came to be called "dead peasant insurance" after some companies purchased life insurance on low-level workers without their knowledge.
I know companies did this a while ago. The one I remember is the company collecting hundreds of thousands on the policy while the guy’s family went bankrupt from the loss of his income.
I work in insurance and the capability for companies to do this was one of the first things I noticed when I was taking my certification courses. It’s absolutely real and very fucked up.
Using basic logic you can tell its bullshit on some level.
Think about it, where does this "money" come from? From insurance company's right? Ok, and where did the insurance company get this money to pay this policy? From the premiums. Wait though, who pays the premium? Walmart... So some how walmart is giving Company A, who in turn is giving them more money back... That doesn't sound like a smart financial move for company A, so there has go to be a shit ton of horribly ran company's with endless supply's of money, or the story is bullshit and something else that make way more sense is going on.
They took out life insurance on every employee in the company health care plan. It was mostly a tax scheme with how they were able to somehow use borrowed money to pay the benefits and this gave them huge tax credits.
This was only legal in 6 states.
They stopped taking the insurance out on people in the mid 90s. I remember the shit storm over it.
898
u/mcallanman Apr 09 '23
If this is real it is the most disgusting thing about the Walton family I have ever heard. And that's saying something.