Director Michael Moore, who is noted for making semi-documentaries about contraversial subjects directed a film called "Capitalism: A Love Story". That was the first time I heard the term "dead peasant's insurance". It sounded like such an antiquated phrase - something that hailed from medieval times. But indeed it was something taking place here and now.
Michael Moore named some of the companies that took out this insurance on their employees. He named names, I am not going to. Here is how it works. Company ABCD has 300 employees. There is always a possibility that out of 300 employees a few will die (illness, accident, old age, etc.). So without the employees' knowledge or permission the Company takes out "dead peasant insurance" on each employee with an insurance company. It is a "bet" if you will that if the employee dies....the Company (not the family of the deceased!) gets a premium. Can you believe such a thing? Oh yes, it happens.
They changed the name from "dead peasant insurance" to "corporate-owned life insurance" but the concept is exactly the same and it is still being done without employees' permission or knowledge. It started out as a tax "shelter" for companies because death insurance benefits are not taxable, so it was a great way for company to gain tax-free money.
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