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

[PaleMail]

No mention in the WSJ article what these life insurance contracts are costing corporations, no doubt well buried in the mumbo jumbo of Annual Reports.

[KewlJoJo]

Does anything interesting ever happen any more?

[DACC]

republican numbers keep plummeting

is that not good?

[CostaDelBarto]

It's definitely good... but it's been like that for some time now and it's more like good weather and not so much like actual news.

[viflyer]

Well, until Democrats turn into Democrats, it doesn't help US much!

[Rich Hosking]

The US federal government is a joke. The corporations own our government, and can do as they please. How are we going to break out of this dysfunctional system??

[vietveter]

It is not dysfunctional

it is fascism, plane and simple

[vietveter]

plain, sorry

[rampage]

Communism is coming, bury your wealth.

[viflyer]

Public campaign financing. ONLY WAY!

[vippy]

I am sooooo fed up with this type of news every day. Corporations do whatever and get away with everything while we argue which party is better. None of them are any good. The sooner we come to realize this the better off we will be. We need some big changes in Washington. Do NOT vote for any incumbent, don't care what party it is, enforce the 4 year term limit by voting them out again.
How else can we fight back? The credit card bill showed us that they are not on the side of the people yet the press makes it out to be like it was a big help. No, it was not. We don't gain anything by it, wake up for crying out loud.

[1differentdrummer]

Do you want to complicate the issue? What if, just asking, what if the bank buys the life insurance policy through their own, in-house life insurance operation? Then they get a first-year commission from the life insurer for maybe 80-90-100%. Now, how is that an expense? They get the commission first year plus they own the cash value and can borrow it out so it works like a little bank account. Banks should never have been allowed into the insurance business.

[breathestolive]

Obviously, you've never sold insurance. There is no such policy that gives more than a 40-50% commission. Not since the 80's.

[garbs]

Have they heard of lean times? Does this not make these companies look like greedy machines?

[rampage]

Nothing will change that perception as it is reality

[simplify]

Tiresome!

[Belisarius]

Blood sucking banker has just taken on a new meaning.

[Belisarius]

Hmmm. If I work these people to death, I can get a nice bonus. Hmmm.

[simplify]

So?....what are we going to do to stop them?. Talk up a storm online?. Ha!!!

[kamachanda]

This is called peon or peasant insurance and is common. The excuse is that companies need to reimbursed the cost of training employees, but it's just another source of income for your basic heartless corporation.
The best part is that ignoring safety problems or harmful conditions on the job will result in quicker payoffs of the peasant insurance investment. Enjoy your day at work, I know I will.

[RepublicansRejected]

I like how JVentura put it, "Obama inherited the mess."

President Obama inherited a huge mess from Dubya that was caused over eight years, yet he is now being expected to fix and clean up that mess in only four months, have the instant gratification folks lost their minds???

[viflyer]

No, but people that support Obama BLINDLY have.

[breathestolive]

If they had minds in the first place, they wouldn't be Republicans. Just sayin'.

[viflyer]

Uh, I think he may be talking about Dems??

[maikonen]

There is going to be a tremendous backlash from all of this.

[rampage]

Only here at this all banks all the time website

[DACC]

I liken it to the "Bankington Post Express"

[arvay]

Vampire capitalism! What an innovation!

Of course, insuring employees and investing the proceeds in employee retirement funds would be socialism. Can't have that, it would corrode people's moral fiber if they felt too secure.

[schatsie]

Vampire cannabalism, these people are eating our future....

[schatsie]

Don't ever forget that these socalled investments are BUSINESS EXPENSES and so are entirely tax deductible, then on the back end, there are no taxes on this investment,,,,better than capital gains...what a racket.... better than a ROTH because they get to deduct it as a business expense and pay no taxes on it.... Quelle Surprise..

Like I said before, time to bring in the FRENCH BANKERS, they have taken NO BAILOUTS and NONE HAVE GONE BELLY UP.....why in the sam hill are we not trusting these people to be consistent and keep robbing the widows, orphans and working slobs like me????

[lcdbsez]

How typical.

The rich always take care of their own . . . everyone else can go dickcheney themselves.

[VivaZapata]

dickcheney themselves! good one. one wants to say, "How do they live with themselves?" but we all know the answer: they're swindlers to begin with. how do people still trust them with their money?