# Employer as beneficiary of life insurance policy? **URL:** \ **Category:** Great Debates\ **Created:** [September 19, 2000, 3:36pm UTC](https://boards.straightdope.com/t/employer-as-beneficiary-of-life-insurance-policy/33728 "2000-09-19T15:36:05Z")\ **Posts on this page:** 7\ **Page:** 1
**Author:** ![Demo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/demo/32/8472_2.png) [@Demo](https://boards.straightdope.com/u/Demo)\ **Post date:** [September 19, 2000, 3:36pm UTC](https://boards.straightdope.com/t/employer-as-beneficiary-of-life-insurance-policy/33728/1 "2000-09-19T15:36:05Z")
I heard this very briefly this morning on the radio, unfortunately, I was unable to find any story related to it on the internet, so I have no link. Bank of America has said it is going to take out life insurance policies on it’s employees, making the financial institution beneficiary. For some reason this doesn’t sit well with me, and I’m not quite sure why, I’ve just never heard of such a thing. Is this possibly the beginning of a new trend in big business, particularly for upper management sorts with lots of air or international commuting? I’m just not sure I even have an opinion on this yet, I just thought it sounded strange. What do you folks think? ---
**Author:** ![psycat90](https://avatars.discourse-cdn.com/v4/letter/p/7ea924/32.png) [@psycat90](https://boards.straightdope.com/u/psycat90)\ **Post date:** [September 19, 2000, 3:37pm UTC](https://boards.straightdope.com/t/employer-as-beneficiary-of-life-insurance-policy/33728/2 "2000-09-19T15:37:42Z")
ugh. Sorry. This thread comes courtesy of **psycat** , not Demo. Sorry for any confusion. Thanks. ---
**Author:** ![kabbes](https://avatars.discourse-cdn.com/v4/letter/k/e99b99/32.png) [@kabbes](https://boards.straightdope.com/u/kabbes)\ **Post date:** [September 19, 2000, 3:40pm UTC](https://boards.straightdope.com/t/employer-as-beneficiary-of-life-insurance-policy/33728/3 "2000-09-19T15:40:13Z")
The effect of this is extremely common in the UK at least. Pension schemes here often guarantee a certain lump sum to a member on death in service. Rather than fund for that themselves, the scheme buys a life assurance policy covering its members. If a member dies, the Life Co pays the Pension Scheme and the Scheme pays the member. Although in effect you could say that the member has the life policy, in actuality the company is the beneficiary. regards, pan ---
**Author:** ![barker](https://avatars.discourse-cdn.com/v4/letter/b/919ad9/32.png) [@barker](https://boards.straightdope.com/u/barker)\ **Post date:** [September 19, 2000, 3:41pm UTC](https://boards.straightdope.com/t/employer-as-beneficiary-of-life-insurance-policy/33728/4 "2000-09-19T15:41:01Z")
Very Common Many companies carry Key Man Life Insurance on its 1)top executives, 2) Creative types and 3) top producers or salespeople. Rational being that if they lost the service of these people, the company would suffer a financial loss. I believe yoy need to obtain the consent of those you take policies out on. ---
**Author:** ![psycat90](https://avatars.discourse-cdn.com/v4/letter/p/7ea924/32.png) [@psycat90](https://boards.straightdope.com/u/psycat90)\ **Post date:** [September 19, 2000, 3:49pm UTC](https://boards.straightdope.com/t/employer-as-beneficiary-of-life-insurance-policy/33728/5 "2000-09-19T15:49:04Z")
hmmm. well, you learn something new everyday. ---
**Author:** ![Joe\_Malik](https://avatars.discourse-cdn.com/v4/letter/j/48db29/32.png) [@Joe\_Malik](https://boards.straightdope.com/u/Joe_Malik)\ **Post date:** [September 19, 2000, 4:08pm UTC](https://boards.straightdope.com/t/employer-as-beneficiary-of-life-insurance-policy/33728/6 "2000-09-19T16:08:20Z")
Note that the company pays the premiums in such cases. Given our stringent laws and penalties for murder, there seems little scope for a conflict of interest. I see no serious objection to such a practice. ---
**Author:** ![zev\_steinhardt](https://avatars.discourse-cdn.com/v4/letter/z/97f17d/32.png) [@zev\_steinhardt](https://boards.straightdope.com/u/zev_steinhardt)\ **Post date:** [September 19, 2000, 4:26pm UTC](https://boards.straightdope.com/t/employer-as-beneficiary-of-life-insurance-policy/33728/7 "2000-09-19T16:26:54Z")
In New York State, any person or entity (like a corporation) that has a _vested interest_ in your survival can take out a life insurance policy on you. Therefore: My wife could take out a policy on me. My kids could take out a policy on me. My employer could take out a policy on me. My loan shark, to whom I owe $2,000,000 could take out a policy on me (assuming the loan was legal, etc.) And there’s not a thing I can do to prevent them as long as they pay their premiums. Zev Steinhardt