Is it right that employers take out life insurance policies on their employees?  Most employees do not even know if their employers have taken out life insurance policies against them, and undertandably so:  how could it feel to work for a company, knowing the company would profit from your death?

Most people had no idea that this practice was even going on until it appeared in the latest Michael Moore film, ‘Capitalism: a Love Story’, and was featured on ABC News (see the video clip from YouTube):

Ok, so it makes sense for companies to have a financial backup plan in the event of losing a key employee:  projects may be delayed, recruitment costs must be covered, and temporary staff may be needed to fill in the gaps.   So then tax breaks were offered to encourage this practice, and it has become far more widespread.

But I can’t think of many policies more likely to discourage employee loyalty, especially when you consider that the employers must have taken the life insurance costs into account when planning the employee’s salary package, and they have no intention of sharing any of the money paid out with the employee’s family.

Work harder…
Work harder…

Where is the motivation for Health and Safety now? Are companies banking on the life insurance outweighing the lawsuits?

What message does this send to employees who want to be loyal to their employers and feel that their hard work is valued?  Instead, are they now realising that their employers will literally benefit from working them to death?

Genuine loyalty comes from a relationship where respect goes both ways.  It shows very little respect for working people to take out life insurance policies against them without even telling them, and then to call these ‘Dead Peasants Policies’ is downright offensive.  Are the people who come up with these ideas complete sociopaths?

So here’s what I’d do if I ran the zoo:

1. Keep the tax break, with legal modifications.
2. Let employers take out life insurance policies on their employees, with their consent.
3. Limit the amount of payout that the employers can keep to a prearranged amount that could reasonably be required to cover lost work time and recruitment costs.
4. Require any amount left over after that to be given to the employees’ families, or a charity of their choice.
5. Allow the employees to add to the policy if they want to, as part of payroll along with tax and social security, with any resulting extra payouts guaranteed to go to their families or whoever they have chosen.
6. Encourage loyalty and a long term relationship by having the employer and employees working together, taking advantage of the tax break for everyone’s benefit.

That way everyone wins – because anything else is just creepy.