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Wal-Mart Took Secret Life Insurance Policies Out On Employees, Collected After Death

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According to CourtTV and the Tampa Tribune, Wal-Mart 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.
She was one of about 350,000 employees secretly insured by walmart. They estimate that the company collected on 75 to 100 policies involving Florida employees who died.
They are trying to make the Armatrout lawsuit a class-action case on behalf of the estates of all the Florida employees who died.
"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.
Apparently, 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. They stopped doing this in 1995, but continued collecting the money on employees and ex-employees who died. Walmart canceled the policies altogether in 2000.
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.
That is indeed creepy. What the hell Walmart...Like we don't have enough reasons to hate you? Thanks for yet another one.
What we need is insurance for those who eat Walmart food. We've all seen those stories.

9 comments

#1Jul 3, 2007 Pamela Jean
Creepy to say the least. Amazing that we are just hearing about this now in 2007 considering the length of time it went on and the number of people affected.
#2Jul 3, 2007 Carolyn E. Price
Your right scoop, this is really amazing. I wouldn't have thought that this was legal in any states let alone the ones listed. Everyone is right, this is just too creepy.
#3Jul 3, 2007 John Rickman
That is shameful, exploitive and just down right evil. My great uncle Sam Walton (founder of Wal-Mart) would be proud. He was a real SOB.
#4Jul 3, 2007 Samantha A. Torrence
That's funny Lensman. I have always heard he was an upright Christian man how would be ashamed of the company today. It is interesting to hear about him from someone who knew him.
#5Jul 3, 2007 Chris V. Thangham
As if Wal-Mart doesn't have enough funds, I hope they make them pay royal money to every employee. They can't even give health insurance to its own employees, but have money to do this. It is just a joke.
#6Jul 3, 2007 patxxoo
Hummm just a bit one sided on this one huh muse? Why do you target one company out of many that was doing the exact same thing according to your own sources?
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.
So are you saying only Wal-Mart was doing this? Let me answer that one for you, uh no they weren't, it was a common practice by numerouse companies.
"Wal-Mart, which said it canceled its policies in early 2000 because it was losing money on the arrangement, says the program was intended to reduce its income taxes to help pay rising employee health care costs. Workers were notified and given the opportunity to opt out, the company said."
"Myers said his law firm has sued corporations for the practice, including Winn-Dixie and Fina Oil and Chemical. The latest case is its first in Florida."
Others companies such as Golden Corral and Camelot Music were also listed
"Myers said this corporate practice is not uncommon. He estimates that up to 25 percent of Fortune 500 companies have taken out such policies on employees. The vast majority of the time, the employees didn't know, Myers said."
I'm like this, If I die my kids will be pleasntly surprised by the life insurance policy that I myself have through Wal-Mart, a free policy that I have paid absolutly nothing for and I could really care less if the company has an unknown policy for the simple reason I know what my children will receive through the ones that I do have. Just why doesn't this bother me um because i'm not a majorly greedy person that's why.
Also just a side note here (1) I live in Florida and heard about this years ago (2) as you know muse I do work for em and have for a bit of time and no I'm not on of those people that are "Wal-Mart happy" but neither am I one of those people that tend to target them specifically either.
#7Jul 3, 2007 John Rickman
@Samantha A. Torrence:
That's funny Lensman. I have always heard he was an upright Christian man how would be ashamed of the company today. It is interesting to hear about him from someone who knew him.
My grandmother hated his guts. He was mean to his family and exploitative of his employees but the corporate spin machine has produced this bleached and fluff dried picture of him.
I do not know a single member of my part of the Walton clan (my Mother's family) who has a good word for the man--maybe it has something to do with the fact that he use to tell his employees that if any of his family members came into one of his stores they were to charge them double! LOL
Not related but my uncle John, for whom I am named, was a full Colonel in the Air Force and after the TV show "The Waltons" came out he had to put flyers on the bulletin board at his base announcing "The proper term with which to refer to the Commanding Officer is 'Colonel' NOT "John Boy."
#8Jul 3, 2007 RobotGod
@patxxoo:
Hummm just a bit one sided on this one huh muse? Why do you target one company out of many that was doing the exact same thing according to your own sources?
So are you saying only Wal-Mart was doing this? Let me answer that one for you, uh no they weren't, it was a common practice by numerouse companies.
"Wal-Mart, which said it canceled its policies in early 2000 because it was losing money on the arrangement, says the program was intended to reduce its income taxes to help pay rising employee health care costs. Workers were notified and given the opportunity to opt out, the company said."
"Myers said his law firm has sued corporations for the practice, including Winn-Dixie and Fina Oil and Chemical. The latest case is its first in Florida."
Others companies such as Golden Corral and Camelot Music were also listed
"Myers said this corporate practice is not uncommon. He estimates that up to 25 percent of Fortune 500 companies have taken out such policies on employees. The vast majority of the time, the employees didn't know, Myers said."
I'm like this, If I die my kids will be pleasntly surprised by the life insurance policy that I myself have through Wal-Mart, a free policy that I have paid absolutly nothing for and I could really care less if the company has an unknown policy for the simple reason I know what my children will receive through the ones that I do have. Just why doesn't this bother me um because i'm not a majorly greedy person that's why.
Also just a side note here (1) I live in Florida and heard about this years ago (2) as you know muse I do work for em and have for a bit of time and no I'm not on of those people that are "Wal-Mart happy" but neither am I one of those people that tend to target them specifically either.
One sided? The story is specifically about Walmart so..yeah I guess..Of course they are not the only ones ever to do this. They are just the focus of this story...
You mad at me now? Not gonna roll back my prices anymore? :(
#9Jan 27, 2014 Thomas Rockford
Wal-Mart needs to make money the good old fashioned American Way. Selling cheap Chinese made products and paying their employees a slave wage with no benefits.

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