BillyVance 34
It's creepy because they did it without telling people. Most people with "key man" insurance know about it and consent to it. Taking life insurance out on someone without their knowledge is scary.
Gawain 0
QuoteIt's creepy because they did it without telling people. Most people with "key man" insurance know about it and consent to it. Taking life insurance out on someone without their knowledge is scary.
Not when it's common practice, nor am I aware of any regulation that would require notice to begin with.
When I worked for the old GTE (predecessor to Verizon), they had a policy on every employee. Over 200,000 people at the time.
These aren't huge policies either. It's not like Wal-Mart has million dollar policies on 350,000 people. That would cost hundreds of millions of dollars in premiums. If I had to guess, the benefit payouts probably range from $10,000 to $50,000 (maybe more in some cases).
So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!
I personally have no problem with this idea...unless they are planning on killing me to collect.
My reality and yours are quite different.
I think we're all Bozos on this bus.
Falcon5232, SCS8170, SCSA353, POPS9398, DS239
I think we're all Bozos on this bus.
Falcon5232, SCS8170, SCSA353, POPS9398, DS239
ryoder 1,590
Quote
When I worked for the old GTE (predecessor to Verizon), they had a policy on every employee. Over 200,000 people at the time.
That makes no sense. The purpose of insurance is to substitute the uncertainty of a large, unaffordable loss, with the certainty of a small, affordable one (the premium). When you have a large pool of people, such as you described, the average annual death rate will be very predictable.
The insurance company must charge enough to cover the benefits paid and cover their operating expenses and a profit. The net result is the benefits paid to GTE must be less than the premiums, unless the insurance company is losing money on the deal. No insurance company will stay in an arrangement where it is losing money.
When I was at General Dynamics, it had about 100,000 employees. It provided health insurance benefits without buying insurance. It was self-insured. Aetna was contracted to do the paperwork and pay the benefits to the employees. Each month it sent GD a bill for reimbursement of the benefits paid out that month, and the administrative costs which were set in the contract.
In the case of GTE, since the company its self was the recipient of the benefits, self-insured life insurance could be implemented simply by doing NOTHING.
"There are only three things of value: younger women, faster airplanes, and bigger crocodiles" - Arthur Jones.
Gawain 0
QuoteQuote
When I worked for the old GTE (predecessor to Verizon), they had a policy on every employee. Over 200,000 people at the time.
That makes no sense. The purpose of insurance is to substitute the uncertainty of a large, unaffordable loss, with the certainty of a small, affordable one (the premium). When you have a large pool of people, such as you described, the average annual death rate will be very predictable.
The insurance company must charge enough to cover the benefits paid and cover their operating expenses and a profit. The net result is the benefits paid to GTE must be less than the premiums, unless the insurance company is losing money on the deal. No insurance company will stay in an arrangement where it is losing money.
When I was at General Dynamics, it had about 100,000 employees. It provided health insurance benefits without buying insurance. It was self-insured. Aetna was contracted to do the paperwork and pay the benefits to the employees. Each month it sent GD a bill for reimbursement of the benefits paid out that month, and the administrative costs which were set in the contract.
Most large Corps. are self-insured. Arguably, every employee is important, but at some point, the math worked. This isn't a health benefit we're talking about, it's a death benefit.
If an insurance company has small policies on 200,000 people (say $20,000 each), the premium is going to be (on a manually underwritten contract) very low.
So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!
Lindsey 0
Maybe it would benefit them as far as taxes go??? How are you taxed on benefits from life insurance? And what about the premiums? Those are probably tax-free dollars.
--
A conservative is just a liberal who's been mugged. A liberal is just a conservative who's been to jail
A conservative is just a liberal who's been mugged. A liberal is just a conservative who's been to jail
ryoder 1,590
Quote
Most large Corps. are self-insured. Arguably, every employee is important, but at some point, the math worked. This isn't a health benefit we're talking about, it's a death benefit.
If an insurance company has small policies on 200,000 people (say $20,000 each), the premium is going to be (on a manually underwritten contract) very low.
You still need to look at it from the POV of their insurance carrier. Unless GTE was paying them more than they were paying back to GTE, they wouldn't be accepting the business.
Perhaps as the other poster pointed out, there was some financial distortion caused by the tax codes.
"There are only three things of value: younger women, faster airplanes, and bigger crocodiles" - Arthur Jones.
Gawain 0
QuoteQuote
Most large Corps. are self-insured. Arguably, every employee is important, but at some point, the math worked. This isn't a health benefit we're talking about, it's a death benefit.
If an insurance company has small policies on 200,000 people (say $20,000 each), the premium is going to be (on a manually underwritten contract) very low.
You still need to look at it from the POV of their insurance carrier. Unless GTE was paying them more than they were paying back to GTE, they wouldn't be accepting the business.
Perhaps as the other poster pointed out, there was some financial distortion caused by the tax codes.
I'm not disputing your point, it's always about the money. What I'm pointing out is that these policies are a tax benefit for the "insured" and the "insurer" almost always has other business with the "insured" on one level or another.
So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!
Did they REALLY believe no one was going to figure it out sooner or later? Say after the first couple hundred policies they cashed in?QuoteArmatrout was one of about 350,000 employees Wal-Mart secretly insured nationwide, said Texas attorney Michael D. Myers, who estimated the company collected on 75 to 100 policies involving Florida employees who died.
You're as wonderful as a slinkie!! NOT REALLY GOOD FOR ANYTHING BUT THEY BRING A SMILE TO YOUR FACE WHEN PUSHED DOWN THE STAIRS.
Actually, they could have that many managers and execs together...
Yep, you think about it, they're quite possibly the largest company in the world in # of employees.