WallStreetOnParade has an interesting article on insurance policies corporations, particularly banks, have taken on their own employees. It's rather amazing.
I can imagine some employees would be of such value to a company that their loss could do great economic harm. Why a policy would continue after an employee has left the company isn't so clear.
Even more confusing is why a bank would have policies on many lower-level employees who can be replaced without undue stress on the bank.
Then I saw the following...
"It is doubtful that regulators are fully aware that BOLI assets may actually remain under the control and management of the banks, rather than the insurance companies providing the death benefits."
What this means is they aren't actually putting the insurance premiums into the hands of an insurance company. The bank is holding onto those assets and continuing to use them to make profits.
But, that's not where the trickery ends.
"Both the buildup in the cash value of the policy over time and the payment of the death benefit are tax-free income to the bank; the more workers they insure, the more tax-free income they receive to help their bottom line; and the less corporations pay in their share of Federal income taxes, shifting more and more of the burden to the struggling middle class."
Yes, that's right, both the profits made from investing the premiums (as any corporations would invest) AND the death benefit paid to the bank are TAX FREE.
Wow, that's a big incentive to insure everyone in the world that you can afford and to gamble big with that money to make huge profits and then to kill all the insured people to collect huge death benefits...TAX-FREE.
This is clearly financial trickery run amok and it must be stopped.
The number of unusual deaths of JPMorgan bank employees in the last year or so has been hard to understand. Now it makes a lot of sense. Whether this means there is foul play isn't yet known.
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