# Wal-Mart: Dead Peasant insurance is pretty fucking low. **URL:** \ **Category:** The BBQ Pit\ **Created:** [December 6, 2002, 3:31am UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845 "2002-12-06T03:31:17Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![red\_dragon60](https://avatars.discourse-cdn.com/v4/letter/r/ce73a5/32.png) [@red\_dragon60](https://boards.straightdope.com/u/red_dragon60)\ **Post date:** [December 6, 2002, 3:31am UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/1 "2002-12-06T03:31:17Z")
[Read about it here.](http://www.transnationale.org/anglais/forums/sante__privatisation/showmessage.asp?messageID=370) I think it’s pretty slimy when a huge company takes out a policy on someone to cash in on them if they kick it, especially without letting them know. If you read the article, you can see how Wal Mart engaged in a huge tax dodge and legal skullduggery to get around the laws that prevent this in Texas. Which brings me to the gist of it. Why is “dead peasant” insurance legal? It sounds really fucking morbid here, by insuring entry-level workers so that they can get a little more cash when a greeter or bagger dies. Nice one Wal Mart. ---
**Author:** ![PhiloVance](https://avatars.discourse-cdn.com/v4/letter/p/e19adc/32.png) [@PhiloVance](https://boards.straightdope.com/u/PhiloVance)\ **Post date:** [December 6, 2002, 3:44am UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/2 "2002-12-06T03:44:43Z")
> [@](#): > > About the only thing that truly frightens Wal-Mart is unionization. They’ll fight that to the death. The above is from a [thread from awhile back](http://boards.straightdope.com/sdmb/showthread.php?threadid=102972). :rolleyes: ---
**Author:** ![Cheesesteak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cheesesteak/32/3694_2.png) [@Cheesesteak](https://boards.straightdope.com/u/Cheesesteak)\ **Post date:** [December 6, 2002, 3:46am UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/3 "2002-12-06T03:46:40Z")
The best part about is the relatives claiming that since Walmart doesn’t have “insurable interest” in the deceased, that the death benefit should go to the…wait for it… relatives. Surprise! ---
**Author:** ![Larry\_Mudd](https://avatars.discourse-cdn.com/v4/letter/l/f14d63/32.png) [@Larry\_Mudd](https://boards.straightdope.com/u/Larry_Mudd)\ **Post date:** [December 6, 2002, 4:40am UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/4 "2002-12-06T04:40:37Z")
> [@](#): > > learman has proved to U.S. District Judge Nancy Atlas that the retailer has no “insurable interest,” that Wal-Mart is not entitled to insurance money and that death benefits should go to the deceased workers’ estates. Not quite the same thing, that. ---
**Author:** ![Muad\_Dib](https://avatars.discourse-cdn.com/v4/letter/m/35a633/32.png) [@Muad\_Dib](https://boards.straightdope.com/u/Muad_Dib)\ **Post date:** [December 6, 2002, 6:43am UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/5 "2002-12-06T06:43:37Z")
It seems weird, but I do not see what is immoral about it or why the money should go to the family. ---
**Author:** ![carrot](https://avatars.discourse-cdn.com/v4/letter/c/9de0a6/32.png) [@carrot](https://boards.straightdope.com/u/carrot)\ **Post date:** [December 6, 2002, 6:55am UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/6 "2002-12-06T06:55:04Z")
> [@](#): > > \*Originally posted by Muad’Dib \* > **It seems weird, but I do not see what is immoral about it** Well, what would you think if SDMB took out a life insurance policy on you, payable to them? I mean, you are a content provider. I don’t see how Wal-Mart can claim to have an insurable interest in someone while, at the same time, paying them five bucks an hour. Whether the money ought to go to the estate or family is another matter. But Wal-Mart has no basis for these policies. ---
**Author:** ![happyheathen](https://avatars.discourse-cdn.com/v4/letter/h/b5e925/32.png) [@happyheathen](https://boards.straightdope.com/u/happyheathen)\ **Post date:** [December 6, 2002, 9:14am UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/7 "2002-12-06T09:14:08Z")
Quick history lesson: When life insurance was first marketed (originally called “death insurance”, same as “fire insurance” - it didn’t sell very well, for some reason), people would insure the town drunk/vagrant and, shortly thereafter, said drunk/vagrant would die under less than foreseeable circumstances. That is where the rule of “insurable interest” came from - you don’t get to benefit from the death of someone unconnected to you. (you also can’t take out fire insurance on the vacant building you don’t own, same idea) While I’m sure Wal-Mart didn’t plan to arrange untimely deaths of their employees, this bit of financial planning is exceedingly sleazy. ---
**Author:** ![kabbes](https://avatars.discourse-cdn.com/v4/letter/k/e99b99/32.png) [@kabbes](https://boards.straightdope.com/u/kabbes)\ **Post date:** [December 6, 2002, 11:15am UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/8 "2002-12-06T11:15:45Z")
In general, companies take out life insurance on their employees since if they die it will cost the company money to recruit and train a new employee. It’s a recognized and fairly common practice in business. I don’t know to what extent the theory really applies in the case of a shelf-stacker, mind you. pan ---
**Author:** ![Cheesesteak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cheesesteak/32/3694_2.png) [@Cheesesteak](https://boards.straightdope.com/u/Cheesesteak)\ **Post date:** [December 6, 2002, 11:25am UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/9 "2002-12-06T11:25:10Z")
> [@](#): > > \*Originally posted by Larry Mudd \* > > learman has proved to U.S. District Judge Nancy Atlas that the retailer has no “insurable interest,” that Wal-Mart is not entitled to insurance money and that death benefits should go to the deceased workers’ estates. > > \*\*Not quite the same thing, that. \*\* True, but I’ll eat my hat if the relatives (mostly spouses, really) in this suit have no stake whatsoever in the estate. It’s obvious that this is really what they want. If I was Wal Mart, I would suggest that the policies be made null and void rather than let the money go to the families, but I’m vindictive that way. ---
**Author:** ![murphyboy99](https://avatars.discourse-cdn.com/v4/letter/m/7ba0ec/32.png) [@murphyboy99](https://boards.straightdope.com/u/murphyboy99)\ **Post date:** [December 6, 2002, 12:04pm UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/10 "2002-12-06T12:04:39Z")
Insurance is basically betting, I can’t see that Wallmart would make cash out of this, because the odds are always with the house. The insurance companies will have “done the math”. Generally Wallmart will pay out more on someone than they receive when that person dies. Otherwise the insurance companies wouldn’t offer the policy. I am suprised that Wallmart are doing this, because it seems like bad buisness, unless they know something that the insurance companies don’t know. If Wallmart are slipping benzene into the water to re-coup their insurance, then that’s pit worthy, otherwise its just a bit macabre. ---
**Author:** ![Desmostylus](https://avatars.discourse-cdn.com/v4/letter/d/c57346/32.png) [@Desmostylus](https://boards.straightdope.com/u/Desmostylus)\ **Post date:** [December 6, 2002, 12:16pm UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/11 "2002-12-06T12:16:07Z")
Whether Wal-Mart benefits depends on the tax status of the insurance payout. If it’s taxable as income, then Wal-Mart makes no net gain. If it’s tax-free, and I suspect that’s the case, then they’ve paid a tax-deductible premium and get back a tax-free payout. I would bet that the premium is slightly higher than the payout, so that the insurance company gets its cut, and Wal-Mart avoids paying tax on the amount of the premium. ---
**Author:** ![Desmostylus](https://avatars.discourse-cdn.com/v4/letter/d/c57346/32.png) [@Desmostylus](https://boards.straightdope.com/u/Desmostylus)\ **Post date:** [December 6, 2002, 12:17pm UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/12 "2002-12-06T12:17:41Z")
I mean, in my opinion, it’s not a matter of scamming the employees but scamming the tax system. ---
**Author:** ![ENugent](https://avatars.discourse-cdn.com/v4/letter/e/4af34b/32.png) [@ENugent](https://boards.straightdope.com/u/ENugent)\ **Post date:** [December 6, 2002, 12:35pm UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/13 "2002-12-06T12:35:49Z")
> [@](#): > > \*Originally posted by Cheesesteak \* > True, but I’ll eat my hat if the relatives (mostly spouses, really) in this suit have no stake whatsoever in the estate. It’s obvious that this is really what they want. So what? You think they should bring suit just for the sake of abstract justice? Of course the person who would benefit from undoing the wrong is the one who’s going to sue to have it undone. Should _I_ go sue the phone company because they stuck **Airman Doors** with a $422 bill? ---
**Author:** ![murphyboy99](https://avatars.discourse-cdn.com/v4/letter/m/7ba0ec/32.png) [@murphyboy99](https://boards.straightdope.com/u/murphyboy99)\ **Post date:** [December 6, 2002, 1:08pm UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/14 "2002-12-06T13:08:04Z")
Desmostylus How does that work ? doesn’t a tax deductable premium just mean that they don’t pay any tax on the premium, then they get a tax free payout. But if the payout is higher than the sum of the premiums then the insurance companies must be paying the difference. Sorry I realise that this is not GQ, so let me add that you are all a bunch of wazzocks. ---
**Author:** ![Desmostylus](https://avatars.discourse-cdn.com/v4/letter/d/c57346/32.png) [@Desmostylus](https://boards.straightdope.com/u/Desmostylus)\ **Post date:** [December 6, 2002, 1:20pm UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/15 "2002-12-06T13:20:17Z")
Wal-Mart works out that, say, one in 10,000 employees dies each year. Conveniently, let’s say they have 100,000 employees. They pay a premium of $1 per employee. Total $10,000. The payout is $950 per death. Total expected payout per year is $9500. So Wal-Mart expects to lose $500 to the insurance company. Wal-Mart doesn’t have to pay tax on the premium, because it wasn’t retained as earnings, it was paid out as an expense. Now, if Wal-Mart’s tax rate is, say, 20%, they don’t have to pay $2000 tax on the $10,000 premium. Wal-Mart comes out $1500 in front. Of course it’s not GQ. Asshole.😛 ---
**Author:** ![Desmostylus](https://avatars.discourse-cdn.com/v4/letter/d/c57346/32.png) [@Desmostylus](https://boards.straightdope.com/u/Desmostylus)\ **Post date:** [December 6, 2002, 1:30pm UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/16 "2002-12-06T13:30:07Z")
I completely stuffed that up didn’t I. ---
**Author:** ![Desmostylus](https://avatars.discourse-cdn.com/v4/letter/d/c57346/32.png) [@Desmostylus](https://boards.straightdope.com/u/Desmostylus)\ **Post date:** [December 6, 2002, 1:36pm UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/17 "2002-12-06T13:36:55Z")
Try again. Wal-Mart works out that, say, one in 10,000 employees dies each year. Conveniently, let’s say they have 100,000 employees. They pay a premium of $1 per employee. Total _$100,000_. The payout is _$9,500_ per death. Total expected payout per year is _$95,000_. So Wal-Mart expects to lose _$5,000_ to the insurance company. Wal-Mart doesn’t have to pay tax on the premium, because it wasn’t retained as earnings, it was paid out as an expense. Now, if Wal-Mart’s tax rate is, say, 20%, they don’t have to pay _$20,000_ tax on the _$100,000_ premium. Wal-Mart comes out _$15,000_ in front. Sigh. ---
**Author:** ![Desmostylus](https://avatars.discourse-cdn.com/v4/letter/d/c57346/32.png) [@Desmostylus](https://boards.straightdope.com/u/Desmostylus)\ **Post date:** [December 6, 2002, 1:42pm UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/18 "2002-12-06T13:42:30Z")
I should also add, in case it’s not obvious, that the insurance company would be in on scam, and set the payout to ensure that the insurance company and Wal-Mart both come out happy. ---
**Author:** ![Cheesesteak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cheesesteak/32/3694_2.png) [@Cheesesteak](https://boards.straightdope.com/u/Cheesesteak)\ **Post date:** [December 6, 2002, 1:45pm UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/19 "2002-12-06T13:45:54Z")
> [@](#): > > \*Originally posted by ENugent \* > \*\*So what? You think they should bring suit just for the sake of abstract justice? Of course the person who would benefit from undoing the wrong is the one who’s going to sue to have it undone. Should _I_ go sue the phone company because they stuck **Airman Doors** with a $422 bill? \*\* Who is the wronged party here? The family hasn’t been hurt, Wal Mart hasn’t taken a single solitary penny from them. The only reason they’re suing is because WM is getting $$$ from the death and they’re not. They need to rectify this hideously unfair situation by making sure the money goes to them instead. IMHO, the families are no less greedy than Wal Mart. ---
**Author:** ![Desmostylus](https://avatars.discourse-cdn.com/v4/letter/d/c57346/32.png) [@Desmostylus](https://boards.straightdope.com/u/Desmostylus)\ **Post date:** [December 6, 2002, 1:59pm UTC](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845/20 "2002-12-06T13:59:56Z")
IMHO, the families aren’t acting in a _morally wrong_ fashion. They’ve been approached by a lawyer who says “you’ve got a chance to get, maybe $32,00 out of that $64,000 [sotto vocce] (and I’ll keep the rest) [/sotto vocce]. What do you say? You’ve got nothing to lose!”. To the families, it’s just a chance for a free ticket in the legal lottery. [Next page](https://boards.straightdope.com/t/wal-mart-dead-peasant-insurance-is-pretty-fucking-low/140845.md?page=2)