Case 30: “Dead Peasant” Life Insurance Policies
1. What are the major ethical issues involved in this case? Is it ethical for an employer to benefit
from the death of an employee if they took out and paid for the policy?
The major ethical issue regards an employer having the ability to take out a corporate-owned life
insurance (COLI) policy on an employee sometimes without the employee’s consent. While not
2. How does the idea that these policies help to fund executive compensation and/or retiree
benefits affect your answer to #1?
Perhaps the use of the funds might make the idea of a COLI more palatable. It’s difficult to
3. Should Congress create more stringent guidelines, beyond “best practices,” for the
administration and use of these types of COLI policies? Should states be pressured to conform to
stricter “consent” policies?
Yes, I believe that Congress should create more stringent guidelines beyond the codification of
4. What are other ways that federal and state governments could encourage businesses to avoid
these COLI policies?