Peasant Uprising: Widow Sues Late Husband’s Employer Over “Dead Peasant” Insurance Policy

180px-brueghelland_of_cockaignedetailIrma Johnson, a Texas widow, is suing after she was mistakingly informed that the employer of her late husband Daniel Johnson was to receive $1.6 million after his death under a practice known in the industry as a “dead peasant” insurance policy. Under this common practice, employers take out life insurance on employees and write off the payments as a business expense. They then collect a windfall when one of the “peasants” die.

The postal service triggered the lawsuit by misdirecting the check made out to Amegy Bank, her husband’s former employer.

These policies can continue for years after an employee has left an employer.

Wal-Mart was recently sued over its use of dead peasant policies of low-level employees and agreed to pay $10.4 million to the families of 380 employees. This has led to protests, including this video. The Walmart litigation was protracted and once again the company fought the lawsuit to guarantee bad press and then settled.

When a policy was written in 2001 for Daniel Johnson, he already had been diagnosed with terminal brain cancer. The project manager had undergone two brain surgeries to remove a tumor and was getting radiation treatments. He was unable to walk or talk. It appears that, while most insurance companies would laugh at individuals seeking insurance at such a medical stage, a bank can get a $1.6 million policy without difficulty.

What is particularly galling is that the bank (then Southwest Bank of Texas), criticized his job performance and demoted him. After buying a supplemental insurance policy, he was fired five months later and then died the following summer.

Here is a clip from a Walmart-Amegy corporate retreat. The key is to first insure the peasants before using them for clay pigeons.

For the full story, click here.

61 thoughts on “Peasant Uprising: Widow Sues Late Husband’s Employer Over “Dead Peasant” Insurance Policy”

  1. I think these policies was originally designed to protect partnerships from the death of a key partner, but this is no longer the case. When I was approached by my previous employer, I was in a low- to middle-management non-critical position, definitely a peasant.

    The abuse of this loophole, which reduces tax revenues from corporate operations, and distracts companies from what their real focus should be, might make an interesting future article or op-ed piece.

  2. When someone that is not related to a deceased person obtains about 9 death records on that person , there is the red flag for sure. Who is watching that store?

  3. Executors, an,Administrator, a Beneficiary, and /or Family have been traditional collectors of a persons life insurance. Since when employers have a right in this? Where are those legislators in the public’s best interest?

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  5. Ultimately, it is nothing more than Corporations profiting from human death.
    A wholly legal and encouraged practice in our Communo-Fascist-Corporate world.

  6. Great article. I appreciate the effort and time you put in this. It’s fun to read, we can get ideas as well. Good job. And not to mention paying attention to the slightest detail you put in this article.

  7. Maybe companies would value their employees health and welfare more if the company had to pay out for their death instead of receiving a disgusting amount of money.

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  9. Someone figured out this scam long ago, and then other corporations picked up on it, and it must have a name and there must be an organization of the folks to do this and they must meet once a year in Sun Valley or Las Vegas or (pre-Katrina) New Orleans or the Bahamas and there must be plenty of waitresses serving them their meals at these conferences and hoping for tips and this is business as we know it folks.

    And they dress well and talk well and get respect. Some among them are criminals as are some among us. BAU.

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  11. @rcampbell OH PLEASE!!!!! Corporate giants such as Wamart corp won’t lose a penny over the loss of an employee. They have such an incredible turnover rate that they are in the business of constantly training new employees in a systematic way. Why this turnover? Because they hire only part time which doesn’t give the pleasure of benefits such as HEALTH insurance and then pay minimum wage while padding their overstuffed pockets as it is. To get RICH off an employees death while the surviving family is burdened with how they are even going to bury the deceased…. That is just sooo low. Really makes me ashamed to be part of this species where the common idea of value, ie- a piece of paper with ink on it, is regarded and worshiped so highly when the reality of it is it has no value. It is PAPER! With INK on it!

  12. Where are the legislators on this one? Insurance policies should be reported as Income , and not just at a loss.

  13. Let me see, Take out an insurance policy on an employee, demote him harass him,fire him and hope his health detiroates, then cash in. Since it’s allmost impossible to find out if such policies exist, the Company could just have him killed for a few thousand bucks.
    Sounds like the New American Way to me.

    Why not just have legislation that requires any insurance co. to notify ANY Insured of ANY policy on them.

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