Like you, I don't understand the ethical dilemma here. It's not like the company is taking money that would otherwise go to the family, or is misrepresenting the purpose of their taking out the policy. What's the big deal? Perhaps there is an angle I'm missing.

The main problem is that the company stands to gain if the death rate among their employees is higher than average, so they pay fewer premiums to get to the payoff. That might incentivize them to reduce health benefits for employees.

But the actuaries at the insurance company price that added risk into the premiums.

I can see there being a big difference in death rates between, say, an Alaskan crab fishing operation and a suburban CPA firm, but 'job' is one of the questions that's asked by life insurers so that's already accounted for.

How would a white collar office employer legally engineer a higher death rate for their people than an equivalent company down the street? Providing only fries and burgers in the canteen? Relocating to an office block near a chemical waste plant? Nothing really seems feasible or effective enough to make a measurable difference to the performance of the investment scheme. The added investment return bought by shortening the lives of some percentage of staff by a few years would be just noise compared to the tax savings this vehicle provides.

The ethical dilemma is whether you should be able to buy insurance against events where you have no direct stake.

Should my employer be insured against my death? What about customers deaths? What about _potential_ customers deaths? What about events other than death?

Or to put it another way, in what way is insurance different than gambling?

In some or perhaps most of these cases this is probably more about managing finances than anything else, but a company has at least a theoretical direct stake in its employees. At the risk of sounding blunt, they incur the cost of having to replace them and the lost productivity in the mean time. If the employee is, say, the lead developer at a startup then having insurance on them might be the difference between the company being able to hire a replacement or having to fold.

> Your only involvement is as the hook that enables the tax advantage.

Agreed. I think what a lot of people are uncomfortable about is that an employee's life is now a "tax-advantaged investment vehicle" for a company.

Anybody other than me commoditizing my life (and death) seems to lack human dignity.

I agree, and want to do "Captain Hindsight" here: if you wanted to get a payout on event X, you should have bought a policy on X (not complain about the person who did).

The problem with this is the fact it further incentives them to do the bare minimum for OSHA & work safety in general. Numerous employers do the minimum already because it costs them money.

If the employer is responsible for providing safety equipment, they shouldn't receive a payout from a failure of said safety equipment.

Did I miss something in this article that presented evidence that companies were neglecting work safety so as to earn returns from life insurance policies on the top 35% of earners in companies?

It wasn't in response to the OP, it was in response to the parent comment.

A financial incentive [payout] from employee deaths is the opposite incentive you'd want for any business that is paying for any kind of safety equipment. You'd want an incentive for the opposite behavior which no one really offers.

https://www.osha.gov/pls/oshaweb/owasrch_news_releases.searc...

You can regularly see companies being cited so "numerous" is reasonable.

The OSHA violations you're citing have nothing to do with life insurance. Has anyone reported on a company that got cited for OSHA violations and had life insurance policies on their employees? Also: wouldn't this be a pretty straightforward basis for the insurers not to pay out claims?

I find this argument approximately as credible as the one that says that, having taken out a life insurance policy on employees, the company now has an incentive to have those employees murdered.

And again: aren't they disallowed from taking out policies on anyone outside the top 35% best paid employees? What are the OSHA concerns for office workers?

Okay let me try explaining this in a different way since you seem to be materially misrepresenting what I’m saying:

1) A significant number of employers pay the bare minimum for worker safety [hence OSHA violations being relevant, such companies clearly exist and some miscalculate. I doubt these people are malicious, merely misjudged the minimum]

2) Life insurance policies being paid out on employees creates further incentive to do the bare minimum to comply with OSHA. In addition to not having to spend additional $$s on safety training & equipment, you now also have an investment vehicle to reinforce this behavior.

3) Many companies have more than 65% of their workforce [construction for instance] doing work in situations that require safety training & equipment. The limitation is based on a payroll %.

I'm confused why this requires spelling out this verbosely, but there it is.

Notice how at no point am I saying any of the stuff you are claiming I am?

I think the misunderstanding is that you're trying to say "hey, this bad thing is possible" but you're wording it in such a way that it sounds like you're saying "hey, this bad thing is happening" and tptacek is taking offense to that claim not coming with any evidence.

I was talking about incentives and I provided evidence for the one claim I made [that numerous companies already do the bare minimum].

So I'm just confused how he could read it that way. But alright, I guess it is on me to be clearer then. :P

I disagree. If the death is in any way related to work, they will get sued or fined and lose a lot more money that way.

The company is just playing the odds. If they have thousands of employees, some of them will die naturally every year. The entire scheme is just to gain the tax advantages of life insurance from those natural deaths.

Actually, no. They have different insurance to cover that. That would be General Liability, Worker Comp, etc.

Even if it works the way you suggest, it is just a wealth transfer from the Federal Government to Life Insurance. That is almost as bad since it means its ultimately a transfer of tax burden from Capital to Labor.