Banks Use Life Insurance To Pay Bonuses

Wall Street Journal:

Banks are using a little-known tactic to help pay bonuses, deferred pay and pensions they owe executives: They're holding life-insurance policies on hundreds of thousands of their workers, with themselves as the beneficiaries.

Read the whole story: Wall Street Journal

Comments

[escribacat]

The idea of some corporation benefitting from my death gives me the creeps. No way.

[breakingpoint]

they only benefit while you're alive, once you kick the bucket it's what you left your kid they get especially, as the dollar devalues or (predicted) collapses. Which basically means they are borrowing the money from you and tossing a check in your coffin. If you can cash it in buy gold, tell only someone you love where you hit it.

[breakingpoint]

Who owns you baby! Cash it all in now!

funny! and when these people die there will be nothing to pass down.

Still Americans aren't mad enough yet. What's it take?

[research]

I told my employer

I refuse to allow them to take out a contract on me.

I always want to be worth more alive than dead.

[davidwayneosedach]

How do they gain by holding these policies? The employees are not all going to die.

[allieq]

which ones are the ones that live forever?

[MissingAmerica]

It used to be that one had to have an insurable interest. My, how times change to fit the circumstances!

[notAMoron]

Did you read the article: "The rules limit companies to buying life insurance to just the top third of earners, who must provide consent."

This is designed to insure someone like a CEO or a key person to the company. I am sure that every TV show has insurance on their star in case the star dies which ends up canceling the show, or top athletes for sports teams. You don't think Apple has an insurable interest in Steve Jobs?

In light of their golden parachutes and the current state of affairs in the financial sector I think that an executive retreat to the lovely Swat Valley or mandatory team building exercise of Climbing K2 would be a good idea.

[allieq]

the article ALSO stated that it was only in 2006 that "the rules limit companies to buying life insurance to just the top third of earners, who must provide consent"...prior to 2006, this was not the case.

[allieq]

from the article:

"Efforts to rein in the practice largely have been unsuccessful, including the most recent rules Congress enacted in 2006. The rules limit companies to buying life insurance to just the top third of earners, who must provide consent. But the rules don't apply to life-insurance that employers bought before the August 2006 rules, which cover millions of current and former employees."

[notAMoron]

We don't need to bank roll a bailout, we just need to start executing bankers and the life insurance policies will pay out. :-)

[ramblingjohnny]

I like the idea but who sell those life insurance anyway? Other banks and financial institution! So if BMA and Chase both loose a VP to an unfortunate car "accident" Chase would send a check to BMA and BMA would send a check to... Chase! lolll

[eposter]

Can I take out insurance policies on insurance executives and bankers to help replenish my 401K?

[NobodysPoodle]

Their depravity has not limit.

[elmerfude]

They would sell their mother's blood to keep the bonus checks going out. That is just the way it is.

[research]

Is Greed still Good?

[quindy]

Just when I thought that I have heard of every scam possible, here is another genius move by bankers to plunder the unsuspected. Do we have laws in this country to prevent this? How can this even be possible? Somebody, please, explain this to me.

[allieq]

i will let george carlin explain it EXACTLY for you:

http://www.youtube.com/watch?v=QT0OJEFlq7A

[eposter]

A bank in our city does the same thing - buys life insurance policies on key employees - they also encourage these key employees to drink heavily at the members only country club that is located on a road with lots of sharp turns and lined by large trees and some ravines.

[allieq]

i dont know if im reading a different article or what...but my understanding is this is NOT key employee insurance. this is for their general workforces...it was not until 2006 that this was changed to only include key employees and only with their consent.

"Efforts to rein in the practice largely have been unsuccessful, including the most recent rules Congress enacted in 2006. The rules limit companies to buying life insurance to just the top third of earners, who must provide consent. But the rules don't apply to life-insurance that employers bought before the August 2006 rules, which cover millions of current and former employees."

[lightningbolt]

You can benefit from a life insurance policy on someone else who's not in you family? Wow! The bankers have been working hard to make crimes legal.

[hill raiser]

why the doom and gloom??

maybe Geithner, Obama, and bernanke are doing a good job. Is the recession over??No more financial crisis?

More regulation will hurt the economy

The stock market keeps going higher

http://iamned.com/blog/ agree completely­...interes­ting

[eladora]

How can they do that? If I wanted ins on my employees I couldnt get it . How can this be ? Oh I forgot. the banks and insurance companies rule the world , and for sure this country.