This essay dead peasaent insurance has a total of 1458 words and 7 pages.
?Peasants of society?
If I eat only healthy foods, if I exercise, if I never smoke or drink or use drugs, if I sleep right, if I get good medical care, if I control my weight, if I control stress, if I keep good social relations, if I keep a healthy mental attitude, if I never have an accident, if I stay excited about life and take perfect care of myself, How long can I extend my life? Since every human being that has ever been born, unless dying prematurely, has gotten old and died, the history of man shows us very clearly, that our life span so far has proven to be limited. So what do we do to insure that our love ones are taken care of when we are no longer here?
Introduction and thesis
Most people prepare with taking out life insurance policies on themselves. Obtaining one isn?t hard but choosing the right one could be tricky. Is your life more valuable to your employer than you are? There are several different life insurance policies that you could get. The one that
concerns me the most is the insurance that employers offer their employees and the employer wounds up getting a percentage of the money leaving your loved ones with not so much to even have a decent burial. This type of life insurance is called Split policy insurance. This is a problem for me as it should be for anyone who works hard and wants their family taken care of in light of their death. My purpose is to inform about the different kinds of life insurance policies that employers can take out on you and your rights regarding this.
Split-Dollar Insurance" is not really an insurance policy. It is a method of paying for insurance coverage. By splitting the premiums and ownership with the employee, the employer is essentially guaranteed of receiving the cost of the employer?s contributions to the plan. At the time of death of the insured-employee, the employer will receive an amount equal to the total premiums paid and the beneficiaries designated by the employee will receive the remaining death benefit.
There are generally three methods of policy ownership in a split-dollar arrangement:
The Collateral Assignment Method ? in this method the employee purchases the life insurance directly and is considered the owner of the policy. The employee then makes a collateral assignment of the policy to the employer in return for the employer to pay the premiums, or part of the premium, on the policy. The employer can pay the premiums and be confident of repayment because the employer holds the policy as collateral. At the time of death, the employer would be repaid the amount of the premium payments contributed to the policy and the balance would be paid to the employee?s designated beneficiaries.
The Endorsement Method ? traditionally the employer is the purchaser and owner of the insurance policy and there is a separate agreement between the employer and the insured employee defining the employee?s rights in the insurance policy. The employer typically names itself as the beneficiary of an amount of the proceeds equal to the cash value of the policy at the time of the insured?s death and, by endorsement, provides that the insured?s beneficiaries have the right to the portion of the proceeds in excess of the cash value (i.e., the ?at risk? portion).
The Usual Arrangement ? under this method, the insured is the original owner of the policy with a named beneficiary and by absolute assignment transfers to the employer a portion of the policy values equal to the premiums paid by the employer. The employee retains all ownership
Rights; however, when the employee dies the proceeds are first applied to the repayment of the employer?s premiums with the balance being distributed to the beneficiaries selected by the insured employee. Should the employee leave the employ of the employer, any cash value in the policy would be used to repay the employer.
Another more explosive revelation is called "dead peasants policy". This is when a company buys a life insurance policy on a rank-and-file, low-level employee ? usually without the employee?s knowledge ? and claims the company as the beneficiary should the employee die. The company retains the policy even after the employee leaves, and if the employee dies, the company receives a large,
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