Wal-Mart and Life Insurance

Karen Armatrout died in 1997. She was an employee of Wal-Mart at the time. Earlier, and without Karen's knowledge, Wal-Mart took out a life insurance policy on her. When she died in 1997, Wal-Mart collected on the insurance money. As it turns out, Wal-Mart has placed life insurance policies on about 350,000 of their employees. Michael Myers (no relation to the horror-movie character or Canadian actor), an attorney in Texas, estimates that Wal-Mart collected on the life insurance of 75 to 100 policies taken out on Florida employees. He's trying to turn Armatrout's case into a class-action lawsuit.

Wal-Mart filed for these life insurance policies back in 1993, for all of their full-time employees between the ages of 18 and 70 who were taking part in the medical benefits program. They were supposedly given notification and the opportunity to opt out. They stopped taking out the policies in 1995, and due to the fact that they were losing money with this program, canceled the policies in 2000.

So here's where judge and jury will step into it - was there wrongdoing? Who's to blame if there was?

I say Wal-Mart is not at all at fault here. I'm not even seeing fault in the first place, except possibly with the insurance companies selling the life insurance policies. The whole problem people seem to be finding with Wal-Mart in this case is I guess either that the employees didn't know about the policies, or that they think Wal-Mart is trying to "profit off the deaths of others" or something.

First off, they obviously didn't profit from this venture, which is why they canceled all of their outstanding policies in 2000. I can completely understand where Wal-Mart is coming from with having them in the first place. I started working for this company about a year ago. When they hired me, on my first day we went into the conference room (there was another guy hired at the same time) and the boss pretty much went over the company policies with us. One thing he mentioned is that the company is going to do everything they can to make sure we stay in these jobs. It's not a matter of "one complaint and you're out" or threatening firings if numbers start slipping. He made us aware of how much money is spent on advertising for the open positions, the time spent by employees to interview when they could be doing other profitable things, and the time spent training someone new - not to mention the profit lost in these positions which were empty between the last person leaving and one of us filling that spot.

Employees are expensive to obtain, train, and even more expensive then lost. I've clawed my way up in this business, though more laterally than vertically. I'm by no means a supervisor or manager, but I now have knowledge of many things in the company, and have a lot of people reliant on my work and the information I know and the files I keep. I finally feel that I have job security because firing me would be losing so much information, having to start over on huge deals and projects, and training a full replacement would either take several months or several new hires.

That in mind, if I were to die - the company would still be out lots of money. Why wouldn't they consider a life insurance policy on me? Or rather - the idea of one. I'm not sure if my value to the company is really worth a life insurance package, but in a larger scale, I can totally see it happening. Large companies take policies out on VPs and other executives. Does it really matter if the employee knows? Not really. The company wouldn't want to let them know how much or how little they're worth, and not everyone would respond calmly to finding out their dead body is now worth money.

Which brings us to the policy-sellers. I don't know much about life insurance policies or that entire industry at all. I don't know how legal it is to have a policy on someone without their signature. I would think that a policy on my head would be something I would have to sign off on. My realist logic, though, says that is probably not the case. I don't have to know who's profiting from my death - it's their insurance, anyway. If I were a director of a movie, I could see myself maybe taking out a policy on an actor or something. If I stand to lose money based on someone dying - I don't care if you personally know them or not, you'd want that investment to be safe. Life insurance doesn't sound like a bad idea.

Do I really see a lawsuit here? No.

I just see an overreacting and emotional loved one who's lashing out at someone who seems better off in some way as a result of that person dying. And if they want it as a class-action lawsuit, it's just a larger number of emotional people.

The company didn't profit. It just helped cushion the blow of the financial burden of rehiring and money lost as a result of that employee's death. Families take out policies on loved ones to help pay for the financial burden of funeral costs. A decrease in sales and interviewing schedules and training programs are the funeral costs to a company - they should have the right to take out policies to help with their burdens as well.

Of course, I could be wrong. I don't know the whole legal aspect of it all. I'm just a person making logical assumptions and what my brain thinks is right and wrong. Let me know if you think otherwise or have more information on the legality of it all.

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