Walmart Took Secret Life Insurance Policies Out On Employees, Collected After Their Death

who buys life insurance policies

According to CourtTV and the Tampa Tribune, Walmart has been secretly taking out life insurance policies on its employees and cashing them in when said employees pass away. That’s what happened to Karen Armatrout and her family, according to a lawsuit filed in U.S. District Court. From the Tampa Tribune:

Armatrout was one of about 350,000 employees Wal-Mart secretly insured nationwide, said Texas attorney Michael D. Myers, who estimated the company collected on 75 to 100 policies involving Florida employees who died.

Myers is seeking to make the Armatrout lawsuit a class-action case on behalf of the estates of all the Florida employees who died while unwittingly insured by Wal-Mart.

“Creepy’s a good word for it,” Myers said. “If you ask the executives that decided to buy these policies and

the insurance companies that sold them, they would say this was designed to create tax benefits for the company, which would use the benefits for benevolent purposes such as buying employee medical benefits.

“If you asked me, I would say they did it to make more money.”

According to the lawsuit, the policies were for $50,000 – $80,0000 and were taken out on any employee from 18-70 who participated in Walmart’s health plan. Walmart stopped taking out the policies in 1995, but continued collecting the money on employees and ex-employees who passed away. Walmart canceled the policies altogether in 2000. Creepy is right. According to CourtTV, only six states, Delaware, Georgia, New Jersey, North Carolina, Pennsylvania, Vermont, allow companies to take out life insurance policies on their employees without notifying them.

Source: consumerist.com

Category: Insurance

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