Does Walmart take out life insurance on their employees?
UPDATED: Jul 7, 2015
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Asked July 7, 2015
Several years ago, Walmart made headlines when it was reported that the company was taking out life insurance policies on key employees. The policies were only purchased for management and other high-level staff, and the practice is fairly common with employers. Walmart also provides company-paid life insurance to a slightly wider range of employees, and makes such insurance available to still others. In both cases, the information is freely available to the public, and Walmart is not currently regarded as having broken insurance or financial regulations.
In order to buy a life insurance policy on someone, you have to be able to show what is known as an insurable interest. In common terms, this means that the person or company, including Walmart , has to be able to show that they will suffer a financial or emotional loss if you pass away. In the case of a leading executive or some other important company figure, the insurable interest is understood, and insurance companies will allow the purchase. The idea is that the insurance proceeds will cover the loss to the company until that employee has been replaced, typically through training specific to the role.
In addition to the life insurance policies owned by Walmart, the company also pays 100% of the personal life insurance for some of their high-level employees. Since they recognize that life insurance can be an important option many families, all qualifying employees have life insurance available through the same group coverage, but must pay the full premiums out of pocket. You status with the company will have an effect on how much of the premiums you pay for a personal policy as well as whether the company has an insurable interest in you position.
Walmart life insurance is provided by Prudential Insurance, an old and well established insurer. The advantage of a company like Prudential is that the company is highly rated with insurance ratings companies, and that indicates long term stability for your insurance policy. For more information about Walmart and life insurance, check out the Walmart website, under employee benefits.
Answered July 7, 2015 by Anonymous