Corporate
owned life insurance (COLI) policies have been used for many years, but it's purpose has changed over the years.
It began as a way to provide
necessary money to a business when a key employee died. The death benefit
allows the employer to recoup some of the loss of earnings incurred when a
productive employee dies, and provides money for recruiting and training a
replacement.
For many years, it was a common practice for an employer to take out life
insurance on all employees.
Because it covered even the most low paying jobs,
this type of insurance was referred to as "dead peasant's life
insurance".
However, tax advantages have been tightened up on COLI policies, and
now employees must give their consent for their employer to take out this type
of life insurance policy on them.
YES your employer can take out life insurance on
you, IF you give your CONSENT.
