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Get Involved: The Lowest Common Denominator (by Mark Cavdar)

Major corporations are well-oiled machines who function in the modern world of industry through the efforts and exploits of their employees. While CEO’s and members of the board preside over the growth and financial aspects of the corporation, the continued maintenance of the company rests on the shoulders of those lower-end employees, the ones who clock in 9-hour days and stay overtime if a task requires completion. Without these employees, one wonders how major corporations would be able to meet seemingly impossible deadlines, fulfill gigantic production goals and maintain rigorous standards of efficiency. One would expect that the corporation would respect the human rights of these employees for the hours of tireless labour. Not so in the case of more than a dozen trusted American conglomerates, which have recently employed an insidious means of milking their employees for every last dollar. Literally.

Felipe M. Tillman was a huge music enthusiast. Taking a job that gave him the opportunity to mix his obsession with his working life, Tillman worked at a Camelot Music store in the closing months of his life. In 1992, Felipe M. Tillman died from complications due to AIDS. Tillman did not own life insurance, nor was he aware of the fact that any policies had been taken out under his namesake. Upon his death, $339,302 of life insurance benefits were doled out by insurance companies for a policy that was registered under the name of Felipe M. Tillman. Who was the benefactor of this lucrative life insurance policy? CM Holdings, the parent company of Camelot Music. Knowing that Tillman’s health was waning, the corporation saw a window of opportunity to earn a little bit more on behalf of Tillman’s efforts. How much of the insurance benefits were paid out to Tillman’s direct family following his death? Not a dime, not even to help cover funeral costs. In life, and now even in death, employees like Felipe M. Tillman are being unwittingly taken advantage of to help further the bottom line of the powers that employ them.

The official name for the practice of corporations purchasing life insurance policies for their worker-drone employees is called “corporate-owned life insurance,” or COLI. However, throughout the business world, the process has been given a nickname that is infinitely more appropriate and as such sinister: dead peasants insurance. A corporation should not be the beneficiary of a life insurance policy. It has no personal connection to the employee outside the bounds of the business relationship, wherein employee does work for payment. The next logical step, following this twisted logic, would see slave drivers taking out life insurance policies on the lives of their servants! The moral fabric of corporations has changed, crossing the line of good taste that protects the interests and asserts of the company into an atrocious, greedy, dollar-starved calamity.

Yet, the sales of COLI policies continue to show healthy gains. The premiums of COLI policies saw a healthy $800 million dollar boost, shooting to nearly $3 billion dollars in the year of 2001. In fact, nearly 20% of all life insurance policies sold each year are corporate owned. While the recent exposures of corporate crime in the media often makes one question just how low corporate America will go to turn a profit, the popularity of dead peasants insurance is not surprising. Corporations are not taxed on gains from a life insurance policy. So, in effect, the extra income generated by the collection of these policies amounts to a tax-free investment exclusively for the businesses. On paper, the concept of dead peasants insurance seems positively rosy for managers and members of the board alike: pure profit collected off the passing of a moderately skilled, easily replaceable employee who can’t have any objections due to the fact that he is blissfully unaware of the sinister policy taken out under his name. But the question then becomes, how sacred is the human life in the greater equation of big business? Business ethics be damned, corporate owned life insurance policies cross over into the outright violation of fundamental human rights and liberties of the human being.

Jane St. John is a mother of two children. She was pregnant with a third at the time of her husband’s death at the hands of a fated automobile accident. After the death of her husband, St. John called her husband’s employer, a Winn-Dixie where he worked as a butcher, to ask about the collection of any life insurance to which she was entitled. Her husband’s employers informed St. John of a $17,500 policy she could collect. However, Winn-Dixie failed to mention the $102,000 that the company had earned off the death of her husband. The company kept this pivotal information from St. John for nearly eight years. St. John only recently uncovered the truth as a result of legal research she commissioned.

Taking a look at some of the corporations that have used dead peasants insurance in the past, one sees a familiar lineup of brands that have become a part of our daily routine: Disney, Nestlé, Tyson Foods, Wal-Mart, Procter & Gamble, Dow Chemical, JP Morgan Chase and AT&T are all among the culprits. These are trusted and established companies. They couldn’t possibly partake in a practice as unethical and corrupt as this! Disney is definitely no Enron! Bad press and negative feedback has caused certain corporations preoccupied with the maintenance of their public image to drop the practice from their corporate policy, with Wal-Mart and Disney among them. However, corporate owned life insurance is still a glaring problem in the business world, an unfair compromise on the lives of employees.

What can we do to stop these hungry corporations from committing further atrocities? First, and most effective, write congress and support the enactment and amendment of legislature that limits a corporation’s freedoms. While COLI is still technically legal, demand an amendment to legislature that forces corporations to inform employees when a policy has been taken out on their life, and also instill a stipulation that allows employees with vehement objection to this practice the right to deny the corporation’s use of their life. Secondly, boycott the companies that use this arcane and diabolical practice. Show them the power of the popular majority. Also, research the business practices of your own employer. Is the company that employs you a fervent believer in the merits of dead peasants insurance? If you are unsure, find out. Who knows, your boss might just be waiting for you to bite the bullet and collect.

Sources

Crenshaw, Albert B and Bill Brubaker. “Companies Gain a Death Benefit.” Washington Post. 30 May 2002. 4 August 2004. <http://www.washingtonpost.com/
ac2/wp-dyn?pagename=article&node=&contentId=A30037-2002May29&notFound=true>.

Etzioni, Amitai. “’Peasant Insurance’ a corporate shame.” The Communitarian Network. 4 August 2004. <http://www.gwu.edu/~ccps/etzioni/B413.html>.

Weston, Liz Pulliam. “Does Your Boss Want You Dead?” MSN. 4 August 2004. <http://moneycentral.msn.com/content/Insurance/P64954.asp>.

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