3 ms·

>This is a tax code discussion that has perilously little to do with life or mortality. Just taxes and ways around them.. I'm not sure that this is just about

>This is a tax code discussion that has perilously little to do with life or mortality. Just taxes and ways around them.. I'm not sure that this is just about taxes. Walmart, for example, made headlines for taking what the industry affectionately calls "dead peasants insurance" on many workers. They realized that low wage workers, unlikely to be able to afford routine doctor's appointments, maintain health and dental insurance, etc. would have a lower average age of death than other workers even if they were currently in good health and easily insurable. Walmart knew answers to questions the insurance companies weren't asking, and made this bet. As morbid as it sounds, this is nothing more than a numbers game, like the stock market or daily fantasy sports. Better information equals better results. Smart companies only do this when they believe they have an edge (though if they are worried about PR, they won't do it at all).

personZ 12y ago
Walmart's case was entirely an elaborate tax dodge. They had no inside information (insurance companies know far more about the probable lifespan of Walmart's employees than Walmart does), and the scheme was entirely predicated on avoiding taxes at every level. Pay $75,000 per employee over the term of the policy to insure them, 100% of that being written off. Get paid out $60,000 per employee, 100% of that payout being tax free. In Walmart's case the insurer even loaned Walmart the entire cost of the policies, allowing Walmart to then write off the interest, never pay a penny until they had to close out the policy and pay out the difference. Insurance companies are not in the business of losing money (they actually make a tonne of money, and are one of the most reliably profitable businesses operating), and they have a much better edge than Walmart or any other employer does. Smart companies only do this when they believe they have an edge And insurance companies only engage in clients or organizations when they know they have an edge -- a large part of the very sophisticated science of underwriting is ensuring that the insurance is highly probable to benefit the insurer, outside of very long odds. Any scheme that assumes otherwise has to involve egregious criminality (such as others are speculating throughout this thread, as if employers are then offing their employees, the dumb insurance companies none the wiser).

personZ 12y ago

Walmart's case was entirely an elaborate tax dodge. They had no inside information (insurance companies know far more about the probable lifespan of Walmart's employees than Walmart does), and the scheme was entirely predicated on avoiding taxes at every level. Pay $75,000 per employee over the term of the policy to insure them, 100% of that being written off. Get paid out $60,000 per employee, 100% of that payout being tax free. In Walmart's case the insurer even loaned Walmart the entire cost of the policies, allowing Walmart to then write off the interest, never pay a penny until they had to close out the policy and pay out the difference. Insurance companies are not in the business of losing money (they actually make a tonne of money, and are one of the most reliably profitable businesses operating), and they have a much better edge than Walmart or any other employer does. Smart companies only do this when they believe they have an edge And insurance companies only engage in clients or organizations when they know they have an edge -- a large part of the very sophisticated science of underwriting is ensuring that the insurance is highly probable to benefit the insurer, outside of very long odds. Any scheme that assumes otherwise has to involve egregious criminality (such as others are speculating throughout this thread, as if employers are then offing their employees, the dumb insurance companies none the wiser).