[wideawake]

The spin on all this is misleading.

The anti-corporate stance on all this is: those ghouls profiting off the death of employees.

The reality is quite different: the government says that money from life insurance proceeds is tax-free. Corporations can choose to put their profits into tax-free investment vehicles or into taxable investment vehicles. All things being equal, companies prefer not to have to pay taxes.

By paying money for insurance premiums, they create an asset on which they do not have to pay taxes. Every once in a while this practice may result in an inadvertent windfall due to a tragedy, but that isn't the goal.

The goal is to shelter assets from the taxman. As long as the company makes its policy clear to its shareholders, it shouldn't cause anyone any consternation.

Blame the tax code - not the company. They're just using every tool the government allows to minimize theft through taxation and maximize shareholder value.

[TroutStalker]

Blame the tax code - not the company. They're just using every tool the government allows to minimize theft through taxation and maximize shareholder value.

Worth repeating.

[TopQuark]

Blame the tax code - not the company.

That is exactly right!

I was surprised to see it in The WSJ. Corporations, which explored American a few centuries ago and subsequently made this nation wealthy, are now synonymous with "bad guy." Very sad indeed.

[lelio]

The goal is to shelter assets from the taxman
If I read the article correctly the only way to collect on this is after the death of the insured. So it really isn't an investment as long as you're alive -- unless you can borrow against it like Panera Bread did according to the article.

KeyCorp declines to comment on Mr. Reid's experience. A spokesman says that "employees do not pay premiums, and therefore there's no reason to disclose the details of the policy to them."
That's just wrong.