Dead peasants in Texas, benefitting Utah's kingpins.
One of the few things that really piqued my interest in Michael Moore's "Capitalism" movie was a segment with a widow whose husband's death made the company he worked for $1.6 million. It was the sort of corporate arrogance and focus on the bottom line that, quite frankly, I wanted to see a lot more reporting on by Moore. Sadly, the movie is light on the reporting, heavy on bluster. But that's a review that Eric D. Snider actually wrote more effectively than I could in City Weekly.
Moore's highlights one such "Dead Peasant" policy -- that is the common name for them in corporate circles -- in his movie. It is the case of Daniel Johnson, who died in 2008 from brain cancer. He was diagnosed in 2001, given supplemental life insurance, and then fired a few months later. His life insurance was canceled when he was fired, but the policy that his company, Amegy Bank, took out on him was not.
Thus, when he died, Amegy Bank received the $1.6 million in tax-free benefits. Johnson's wife, who was now raising two children alone, received nothing.
She found out about the Amegy life insurance policy when a check was mistakenly sent to her, not the bank. She then sued the company, which shone a bright light on these cases early this year. Moore's movie, and his promotional tour where he is highlighting this case, has given the issue new legs.
These policies, by the way, are legal. However, they were originally intended to allow companies to take out life insurance policies on their top executives, not on every mid- and low-level employee. But corporations have discovered that these are a low-risk investment strategy that provides, when they do pay, tax-free earnings.
And why do we, humble residents of the state of Utah, care? Well, Amegy Bank is a unit of Zions Bankcorp. So, for any of you who may be currently working for Zions (or one of their units) in some capacity, be comforted with the fact that, if you die, you could very well be helping the company's bottom line.
Hat tip for the Zions connection to Glen Warchol, who is hopefully enjoying his vacation.