Dead Peasant Insurance is sometimes used as a shorthand reference for life insurance policies that insure a company’s rank-and-file employees and name the company as the beneficiary. This means that the company receives the life insurance benefits when the covered employees die. This insurance may also be called “janitor insurance,” “corporate-owned life insurance,” or “COLI.”
Winn Dixie Stores bought life insurance policies on approximately 36,000 of its employees, without their knowledge or consent, and named itself as the policies’ beneficiary. The insurance brokerage firm that placed the policies prepared two memos describing the deceased employees as “Dead Peasants.” These memos were part of the court’s record in a lawsuit in which the United States Court of Appeals for the Eleventh Circuit held that Winn-Dixie’s policies were a sham transaction for federal income tax purposes. The memos were later used by reporters such as Ellen Schultz and Theo Francis of the Wall Street Journal and L.M. Sixel of the Houston Chronicle and incorporated into articles about this type of insurance.
It is often difficult for a person to learn whether he or she was covered by a “Dead Peasant” policy. These insurance programs became popular during the mid-1980s and have been an available investment opportunity for large companies since that time. Prior to 2006, however, there was no federal law that required employers to disclose the policies to insured employees. Any disclosure requirements that existed before 2006 were only through state laws, which were ignored in many instances. So, the only way a person could learn about the policies was through the employer’s voluntary disclosure.
Because a company’s purchase of insurance policies is not a public record, it is virtually impossible to know every company that invested in policies on employees’ lives. The following companies, however, are believed to have been named as the beneficiary of life insurance policies on …more »