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  1. #61
    Order Now! pure_mercury's Avatar
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    Quote Originally Posted by cafe View Post
    For some reason it is (was?) legal for corporations to do something that is not legal for private citizens to do -- purchase life insurance policies on other people without their knowledge or consent.

    If it is not legal for a private citizen to do something then why should a corporation be allowed to do it? Why is the corporation allowed to do it if a private citizen is not? How could Walmart possibly have 350,000 employees whose deaths would cause them significant financial hardship? Seriously! Do you think they are going to lose a dime if a cashier or stocker dies?

    There is no legitimate reason for a policy like this -- it is purely profiting from a death and nothing else. If Walmart can buy a policy for the sole purpose of profiting from someone's death then I should be able to buy a policy profiting from your death or from Donald Trump's death.

    Now why do you think it is that Walmart has the legal option to profit from Stella the cashier's death, but Stella doesn't have the legal option to profit from Robert Walton's death? I think it is because Walmart has lobbyists and Stella does not.

    Now if Robert Walton calls up Joe Insurance Agent and says "Hey Joe, this is Robert Walton. I'd like to buy a life insurance policy on Stella the Cashier for $100, 000. Can you set that up for me?" I'm guessing Joe Insurance Agent is going to think 'I bet Robert has a lot of folks for me to insure. Sounds good to me.'

    But if Stella calls up Joe Insurance Agent and says "Hey Joe, this is Stella the Walmart cashier. A couple of my cashier friends and I would like to buy a $100,00 life insurance policy on Robert Walton. Can you set that up for us?" Joe Insurance Agent is probably going to think 'Who the hell is Stella and how stupid would I have to be to sell her a policy that's would piss Robert Walton off if he ever found out about it?'

    Now essentially, Robert isn't going to lose anything if Stella keels over dead playing bingo on her day off and Stella isn't going to lose anything if Robert gets hit in the head with a stray golf ball and dies. But Robert can buy a policy on Stella while Joe Insurance Agent is unlikely to sell Stella such a policy on Robert. She just doesn't have the clout.

    If the company is going to sell such a policy to Robert, then they should have to sell a policy to Stella. It shouldn't matter that Robert can buy 350,000 policies and Stella can only buy one.

    No, you should only be able to purchase these policies when you are affected financially by that person's life. Hence my stance that BOTH employees AND employers should be able to purchase policies, if they can find someone to sell them one. I thought that was clear.
    Who wants to try a bottle of merc's "Extroversion Olive Oil?"

  2. #62
    Senior Member cafe's Avatar
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    Quote Originally Posted by pure_mercury View Post
    No, you should only be able to purchase these policies when you are affected financially by that person's life. Hence my stance that BOTH employees AND employers should be able to purchase policies, if they can find someone to sell them one. I thought that was clear.
    So Robert Walton should not be able to buy a policy on Stella the Cashier unless he can prove that he will incur a financial loss equal to the amount of the policy if she should die? Like, say for instance, if he has about four other cashiers at the same store that are working only fifteen hours a week, but have requested more hours and are willing to work the hours that the now-dead Stella would have worked and at the same wage, he shouldn't be able to buy a life insurance policy on her, right?

    And you don't think that Robert's status would influence an insurance company in a way that Stella's status wouldn't when it comes to purchasing a policy one the other? Or if it did, there isn't anything unethical about that?
    “There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.”
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  3. #63
    Senior Member eagleseven's Avatar
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    Quote Originally Posted by cafe View Post
    So Robert Walton should not be able to buy a policy on Stella the Cashier unless he can prove that he will incur a financial loss equal to the amount of the policy if she should die? Like, say for instance, if he has about four other cashiers at the same store that are working only fifteen hours a week, but have requested more hours and are willing to work the hours that the now-dead Stella would have worked and at the same wage, he shouldn't be able to buy a life insurance policy on her, right?
    In your scenario, he should be able to buy a life insurance policy roughly equal to the cost of training another employee to do Stella's job.

    As I said before, insurance companies are too clever to allow corporations to make money over-insuring their lowest-level employees. The best employees to insure are those who have hard-to-acquire skills.

    Wal-Mart will not take a serious enough hit to warrant life-insurance on a cashier, but may be set back for months if an experienced supply-chain manager suddenly croaks.

    Quote Originally Posted by cafe View Post
    And you don't think that Robert's status would influence an insurance company in a way that Stella's status wouldn't when it comes to purchasing a policy one the other? Or if it did, there isn't anything unethical about that?
    Simply put, Stella does not have the income to purchase a life insurance policy on Robert Walton, because his policy would pay out millions.

    On the other hand, Stella can always purchase private unemployment insurance, which may be needed if Robert Walton suddenly dies.

  4. #64
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by eagleseven View Post
    What is the difference between an employer purchasing a life-insurance policy on me, and my spouse purchasing a life insurance policy on me?

    Both are doing so because they would be financially damaged by my death.
    In order to come to this conclusion, you have to dismiss important details that make it difficult to take your statement seriously.

    You completely ignore the fact that humans are emotional entities. Humans are not rational calculators. Your spouse most likely would have at least some level of emotional attachment to you. I don't think corporations go through any stages of grief.

    The level of financial dependency is almost always higher between spouses than between employers and employees (and that is true 100% of the time in the context we're discussing this issue). This is a matter of degrees, and the hardship a company faces when losing an employee is orders of magnitude lower than when a family loses a breadwinner.

    You and pure mercury keep trying to change the framing of this issue. This was not just a case of companies recovering the cost of replacing an employee. These companies were profiting massively. How much does it cost to replace a Wal-Mart cashier? Certainly not anything on the order of 50-100 thousand dollars, but that is the type of payout these companies were receiving for that level of employee. These were life insurance policies, policies intended to replace lost family income, pay off debts, cover funeral expenses, etc.

    I wouldn't be against the idea of companies having some sort of insurance policies that covered only the cost of replacing an employee. But those would not be life insurance policies, and they wouldn't be nearly as profitable. Then we're talking about something on the order of $100-$200 to replace a Wal-Mart cashier, not $50-100 thousand.

    I think you are so tied to your ideology, that government needs to stay out of the way of business, that it blinds you to how morally reprehensible this practice is (was).
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  5. #65
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    Simply put, Stella does not have the income to purchase a life insurance policy on Robert Walton, because his policy would pay out millions.
    Stella and the employees should be able to pool their resources and buy a policy, if someone wants to sell it. NOT through a union, but voluntarily.


    On the other hand, Stella can always purchase private unemployment insurance, which may be needed if Robert Walton suddenly dies.
    Definitely.
    Who wants to try a bottle of merc's "Extroversion Olive Oil?"

  6. #66

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    It makes sense that a company like a family can insure against loss of income. The problem here is that a worker dying has financial benefits. This applies in a family also, but the financial benefit is usually outweighed by the emotional loss, making it an unattractive outcome. The problem in a business is that without that emotional attachment the best case scenario might become death, and morally/ethically a system should not be set up in a way which encourages that outcome.

    So the question could be: Does a company lose enough in the event of a worker dying for it not to be a desired situation?

    eg. retraining, effect of grief on worker morale, etc.
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  7. #67
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by pure_mercury View Post
    No, you should only be able to purchase these policies when you are affected financially by that person's life. Hence my stance that BOTH employees AND employers should be able to purchase policies, if they can find someone to sell them one. I thought that was clear.
    I don't agree with this at all. The purpose of insurance is to mitigate the effects of catastrophic events (death of a family member, house burns down, etc), not any event that could have a negative outcome. Your view of insurance is not practical.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  8. #68
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    Quote Originally Posted by Lateralus View Post
    I don't agree with this at all. The purpose of insurance is to mitigate the effects of catastrophic events (death of a family member, house burns down, etc), not any event that could have a negative outcome. Your view of insurance is not practical.
    I have insurance on my cell phone. As much as I love it, it would not be a catastrophe if I drop it in a toilet.
    Who wants to try a bottle of merc's "Extroversion Olive Oil?"

  9. #69
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by pure_mercury View Post
    I have insurance on my cell phone. As much as I love it, it would not be a catastrophe if I drop it in a toilet.
    And when insurance is applied in that fashion, prices rise. See health care as the most obvious example of this.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  10. #70
    Senior Member eagleseven's Avatar
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    Quote Originally Posted by Lateralus View Post
    You and pure mercury keep trying to change the framing of this issue. This was not just a case of companies recovering the cost of replacing an employee. These companies were profiting massively. How much does it cost to replace a Wal-Mart cashier? Certainly not anything on the order of 50-100 thousand dollars, but that is the type of payout these companies were receiving for that level of employee. These were life insurance policies, policies intended to replace lost family income, pay off debts, cover funeral expenses, etc.

    I wouldn't be against the idea of companies having some sort of insurance policies that covered only the cost of replacing an employee. But those would not be life insurance policies, and they wouldn't be nearly as profitable. Then we're talking about something on the order of $100-$200 to replace a Wal-Mart cashier, not $50-100 thousand.
    According to the article cited, businesses were receiving insurance payouts even long after the said employees had left the company. The fact that, in net, total payouts were less than the total cost of premiums, was overpowered by the fact that these policies are tax-exempt.

    In other words, the problem with this practice is not "OMG my employer wants me dead" but rather "Corporations are using life insurance companies to avoid taxes."

    ---

    Framing this issue as a moral dilemma, rather than as a tax loophole, is disingenuous by the authors (which does not surprise me, being MSNBC and SFGate)

    * Companies pay a whopping $8 billion in premiums each year for such coverage, according to the American Council of Life Insurers, a trade group.

    * The policies make up more than 20% of the all the life insurance sold each year.

    * Companies expect to reap more than $9 billion in tax breaks from these policies over the next five years. The policies are treated as whole life policies. So, companies can borrow against the policies (though the IRS won't let them write off the interest). And the death benefits are tax-free.

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