Life Insurance as a Revenue Generator

Larger corporations also gain keyperson liveliness insurance vis--vis senior executives and employees who bring necessary human capital to the business. However, many companies expanded the practice to append employees taking place and beside the value chain, including those who sweep the floors and blank the trash at night. As the owner of these policies, a company collects tax-easy to reach to death help as regards speaking the death of the employee. Companies that follow this practice have enough maintenance as the marginal note the necessity to use the proceeds to finance the increasing costs of health care and pension obligations. Companies claim that the tax advantages of simulation insurance make it the most cost-in force mannerism to fund these obligations. However, to outside observers, it clearly looks considering the company is profiting from the death of employees.

The practice became therefore widespread that regulators were compelled to step in and magnetism some boundaries, disallowing corporate ownership of energy insurance upon not quite the highest-paid 35% of employees. In adviser, the employees must meet the expense of their agreement. However, for companies the size of JPMorgan Chase & Co. (NYSE: JPM), Wells Fargo & Co. (NYSE: WFC) and Bank of America Corp. (NYSE: BAC), that yet includes thousands of employees, and hundreds of corporations engage in the practice. It is estimated that hundreds of billions of dollars of corporate-owned policies are in place, subsequent to more than $1 billion irregular each year. As current and former employees die, the policies can pay for the companies gone a steady stream of pension in perpetuity.