What kind of company helps provide insurance for it's employees? Wal-Mart! What company names themselves the beneficiary for life-insurance policies on it's employees? Wal-Mart!!

Here is a nice article to cover the details. And a quote from that piece...

It is a great likelihood that a widowed spouse contacted the insurance company to find out that, outrageous as it may have seemed, the death benefits went to Wal-Mart instead. This is an excellent example of the current level of corporate responsibility. This is a literal example of a company feeling they "own" employees... in that it illustrates it better than I could have in prose. And if that wasn't bad enough, it goes on to state...

Wow. So Wal-Mart gets the right to cover the employees and hide that little detail from everyone? Hmmm. Hope none of them meet with unfortunate, unexplicable endings to their lifes.

I fail to see anything wrong with this. It's not like they're collecting benefits from life insurance paid by the workers themselves, Wal-Mart was the entity paying the insurance premiums so that it could have a financial cushion in the event that it lost the employees.

Yeah, they aren't giving insurance to their employees and nameing themselves beneficiaries, they are taking out insurance policies on them.

What is "wrong" with it is the issue of people being treated as property, I suppose. It does have its initial revolting aspect, thats to be certain, but, I can't really explain exact what is wrong with that.

Plus, theres all those old people at Walmart.

They're being treated as assets to the company, which they are. Assets valaube enough to Wal-Mart to warrant insuring against their loss.

Yeah, which is why I put quotes around what "wrong" and said what I said.

Having a bit of schooling in accounting (once was my major study in college), what column do you put "people" under on the books? And what is the specific journal entry to use for people? Also, where on the financial reports is the line representing the "value" of employees?

Companies, especially ones like Wal-Mart, do not own it's employees. The idea that they are "their assets" which they are allowed to insure is setting a bad precedent. Heck, don't even like the idea of parents getting life insurance on their children and naming themselves as beneficiaries. It can surely be argued that there will always be funeral expenses, but you seriously have to ask yourself why they felt it necessary to cover their offspring.

And any time a person or corporation takes life insurance policies out on me, I DEFINATELY want to be informed. Not that I'd be overly-paranoid, but forewarning that someone would benefit from my death is something that deserves to be known. To be honest, not even sure the Eye-talian Mafia goes to the extreme of covering it's made members. Can you see it now? They take out policies on those right before they put out contracts on them?

People are NOT assets that belong to a company. They are a resource for generating wealth through productivity. Unless you are bringing back slave trade.

You've defeated your own argument, assets and resources are synonyms.

If you want to get technical, the economic definition of employees is a form of Capital for their employees. No, companies don't own the people themselves, but they own their labor for the company.

Employers often invest a lot of money into their employees, it makes sense that they'd want to insure against their loss. The fact that they're insuring against lost people rather than lost equipment makes absolutely no difference, it serves the exact same purpose in the economy, and the ability to insure is a boon to the market by minimizing risk.

Your only other argument against this seems to be a general one: "insurance shouldn't be allowed because people might commit insurance fraud." People can abuse just about everything in this world, that doesn't mean we should outlaw everything. Insurance plays a vital role in the postmodern economy, disallowing it will only hamper things.

The Internet can be considered a resource. A public library is supposed to be a resource. People are a valueable resource in that they can offer value via productivity. They are the human aspect in the equation of utilizing actual company assets to produce profitability. All of these are not synonymous with an asset that is an owned quantity. If I provide a service for free, say web-hosting, that doesn't mean you own my equipment... you are just utilizing an available resource.

If companies were truly interested in preventing loss of employees (to death, turnover, whatever means, etc.), they need insure against the loss by providing health-care coverage assistance, additional job-training for further advancement, safer work environments or even pay bonuses. It seems you are saying they have every right to protect their potential profitability of it's personnel. Those purported costs of training new hires is going to occur, regardless as to who they bring on board.



And the precedent I am trying to point out is that if we use such justifications, we will find out the range of excuses to cover another human being with a life-insurance policy will get wider and wider. Heck, like Delta pointed out, Wal-Mart hires a lot of older people more likely to perish than to hire younger people and retain them through measures I'd listed in the above paragraph. SO it certainly would behoove them to cover all the 60+ aged folks working for them. Yet that was a business decision, a poor practice on their part if they were really worried about their people being able to return to work.

And honestly, how much "training" do you think the store greeters need? Or the cart-pushers? You going to buy into the idea that Wal-Mart lost hundreds or thousands of dollars for the expensive training materials or total hours of instruction?

Where will the line be drawn? Hourly employees? Salaried? Oh my gosh, wait a minute... let's look at the retirement benefits that they no longer have to pay if they've died. Are we not counting that as an off-set? Oh, let's throw contractors and even sub-contractors into the mix of who is covered now. Also, let's make it regardless of whether they are legal or illegal workers.

Then there is the conflict of interest. Why work toward safer work environments if there is a pay-off at the end for having a more dangerous workplace??

You're missing the point by allowing yourself to get caught up in the semantics. As I've said, the technical designation for employees in this sense is as a form of Capital.

It doesn't matter what you call them, all that matters is the function they serve. The fact that they are valuable to the company makes it useful to be able to insure against their loss.

Those are further measures which minimize the company's risk from loss, yes. And all of those are options taken by many employers as well and sometimes instead. But none of them make direct insurance any less useful.

Indeed. Which is why such insurance is helpful.

Of course there will always be problems and potential for abuse within systems. But we should be looking for ways to regulate practices like these without forbidding appropriate uses that have real value. Personally, I think it would be better if insurers were offering, rather than life-insurance, simple loss-insurance, so that employers would collect upon an employee leaving the company for any reason, rather than just death. Insurance like that would make it easier to pay severance bonuses and pensions as well as offset cost of new hirings, and encouraging corporations to pursue employee retention to a greater degree.

Yes, but remember that insurance corporations are themselves out to profit, and they're hardly stupid.

And these are not going to be the kind of people it really makes sense to insure; those are going to be more middle-management and above in the corporate structure. Right now, there is some tendency to insure people for whom it shouldn't make economic sense; but that's because of government mismanagement and the fact that it's a relatively new market and the two sides haven't figured out which of them is going to be the loser. All of these problems are cause by minor distortions in the market that can be fixed by closing tax loopholes, improving legal definitions, and with the technical advancement of the market itself; but none of it makes insurance itself immoral or evil.

Yes, I could almost understand covering long-time employees (10+ years) that have reached high middle to upper management levels which will "hurt" the company in the event of their deaths. That still doesn't justify making business decisions to cover people with life-insurance, especially without their knowledge.

But instead of being co-pay & co-beneficiaries, it is the corporations that are choosing to do this as a means of profiteering. Just because someone may have a 78-year old person working for them doesn't give anyone the right to cash in on a policy because they were more likely to die than not.

You've made arguements as why businesses should be able to cover employees while I'd mentioned ways of dealing with the issues of where they are supposedly losing money. Higher training efficieny (maybe even outsourced), temporary agencies, hiring younger generations and establishing good career paths w/retention policies added. Just because the companies demonstrate poor business practices, you are saying they are more than deserving to what you seem to feel as being a very sound practice in insuring it's workers.

Insurance, especially life insurance, isn't for the betterment of companies. It is for looking out for the needs of that person's family after they pass on from their livelihood. It isn't about adding to a corporation's bottom line. Families are the reason this kind of insurance even exists at all. If companies want to gamble on how to achieve large returns on their investments, they should invest in junk bonds, penny-stocks, horse-racing and a few table games in Vegas. And that is all an insurance policy would be on any of it's employees... a way to get a pay-off. It's not about covering their losses.

Even if I were to point out that it wasn't top management Wal-Mart was covering, you'd still probably feel they have every right.

This sentence is nonsensical.

As I said previously, all of these are policies undertaken by employers to minimize the risk from loss of their employees. None of them are reasons to disallow insuring against the loss directly.

The purpose of insurance, regardless of who is taking out the policy, is to reduce the risk faced by the possibility of loss or damage to the asset being insured. That's the case whether you're a family hoping to survive the death of a relative, or a corporation trying to reduce profit lost from a dying employee.

You're using a terribly simple and idealistic analysis of the economy that's quite simply useless. Whatever moralistic purposes may have been in the origins of insurance policies, they play an incredibly important role in the upkeep of the modern economy, even life insurance. Banning people from using insurance as a market tool only hurts the economy and everyone in it.

I've said all this before, but here we go again: there are changes that need to be made to the system to prevent abusive manipulations. Tax codes need adjustment so that there's not an incentive to use these policies as tax shelters (which distorts the entire industry to a larger size than it should be by throwing off the insurer/policy-holder profit balance). Further the definitions of insurable assets need to be adjusted so that such policies expire once the employees leave the company. Rather than life insurance, the market would be better served if corporations were able to take out broader loss-insurance policies that kick in when an employee left an employer for any reason, including death; that's a transformation we'll probably see before long in the industry, a transformation of the economy which should help all sides.

But disallowing employers from taking out insurance on their employees is just stupid.

Guess your ideal situation will lead to a lot more strange accidents.

A company isn't a family member that would lose the benefit of profit earning, because corporations can hire new staff to fill vacancies. So yeah, it's a big difference between a man with a wife and 2.54 children at home who will leave behind personal debts while at a loss of beneficial income.


Companies that claim to lose money in those situations are subjectively using it as a reason to gain from a practice that isn't really ethical. Unless of course you feel that production companies in the porn industry need to cover their brightest stars for the thousands upon thousands of dollars for lost revenue. Looking back, am sure that they would have loved an excuse like that to cover a John Holmes or Maryln Chambers, touting they would have netted becoups of money had they been alive or even remain youthfully exuberant.


And you are likely choosing to ignore the serious conflict of interests involved. Example: Safer work environments won't be a priority if insurance payoffs are high. And while that would be perfectly legal in meeting the minimal state, local and OSHA safety standards... it's not really ethical if they profit from avoiding worker safety. Just think how many illegalities are going to occur when the gains are still higher than anticipated? Wal-Mart is guilty of a broad range of activies, from purchasing products made by child-labour in other countries to hiring illegals in this country.

Child Labour

Reckon you're wiling to say it's okay to insure them?

Your argument would lead us to the similar conclusion that we should outlaw fire insurance because it causes arson.

The potential for criminal abuse of a thing is not a justification for it to be banned outright.

Once again:

Insurance companies also seek profit. You won't find them going out of their way to cover bad propositions, which is what you're claiming they're doing.

This market is subject to some fairly problematic distortions, but there are corrections coming. It's new and the players are still figuring out where the proper balance is. The US Government also creates a problem with tax laws and legal definitions that makes it overly beneficial to corporations to tie up their money in this way. Revisions of the legal code are thus needed to help nudge the market back towards efficient equilibrium, but not to such a drastic degree as to outlaw this entire practice.





This is the third time I've said much of this now. If you're going to continue to ignore me, and continue to present arguments that are essentially non-issues here, I'll be responding by copy+pasting my previous statements.

I think this is a very good idea, set up some form of employee insurance under any situation, not just death, and use that to pay pensions and severance.

It could fill a duel role of insuring the books for the company and being (or at least appearing to be) a steady, not-dipping-into, set of money for the employee in case of retirement/whatever. Plus it helps to suppress the knee-jerk reaction to what this policy does.

Yes, changing the label and scope does make it more sensible. On L.P.'s rationales that it is good, smart business to make sure companies profit when people die because of lost profits, then there are a few others that should be able to take out life insurance on people under such premise, like...

Other Examples
Federal, state and municipal governments (lost taxes)
Nevada, New Jersey and indian casinos (lost gambling income)
Local, nation-wide or international charities (lost charity)
Insurance companies themselves (lost premiums)

Because insurance companies certainly aren't going to turn away premiums that they could collect, regardless of circumstances. And if a company can cover an employee with life insurance, why not all of the members of the employees immediately family? Or wait, maybe there's even nothing requiring people to have any kind of familial or work relational ties?

Gee, guess I can take out a few life insurance policies on folks here then. Y'all won't object, right??

There has to be a better premise for companies to insure people that lost profits. Again, the origins of life insurance dealt strictly with a person choosing to take it out on themselves. Calling it something different would be a certain step in the right direction (like "employee-loss insurance") because there is something called legislation that would affect it under the original moniker.

Oddly enough my employers handed me a life insurance form the other day. They pay for it but I name the beneficiary.

Wouldn't hurt to double-check on them. They could fill out a new form and put in a different beneficiary. Make sure you know who the insurer is and possibly a policy number or other reference number (if able). Sorry, distrust for companies runs deep here.