On a recent podcast with Akademiks’ Off The Record, rapper French Montana states record labels have life insurance policies on their acts which would be hugely profitable, especially in the hip hop community.
“They’re being realistic and you know, you’re supposed to have life insurance anyway, but when the label does it if you don’t have one, that’s crazy, you know?” The keywords are “YOU'RE supposed to have one” which is not only paramount for one's family but is the more important question. But getting back to the labels is this true?
It certainly has been true of MANY corporations who had life insurance on high-level execs down to the low-level staffers at corporations like Walmart. It's called “Dead Peasant” insurance where a company could take out life insurance on you without your knowledge and receive a payout in the event of your death.
What is/was Dead Peasant Insurance?
Dead peasant insurance is a nickname that was given to corporate-owned life insurance policies after large companies were found buying policies on employees without their knowledge. COLI or company-owned life insurance was initially intended for founders and high-level employees but many companies realized they could take it out on any employee and they did and took advantage.
Group Life Insurance
Having life insurance is an absolute necessity, especially for people over 40 or high-risk lifestyles. Does your company offer Group Life Insurance where they cover all or some of the cost as a benefit?
Ask your company if they have life insurance on you if you don't think it will affect your employment and also ask if they offer Split-Dollar insurance which is an agreement by the employee and the employer to split the cost of life insurance which is a much better option when you can't afford the monthly costs of life insurance.
Dead Peasant Tax Breaks
Companies were allowed to do this in order to get a tax break. Did it go too far? Some families who had no life insurance thought they were entitled to the payouts, one woman whose husband died of a massive heart attack at a local retailer, got a check in error for a million dollars and thought it was hers until the corporation called her and asked for THEIR check. She had no money to pay for funeral costs and felt the money should have come to her. Not so. Her HUSBAND should have had life insurance to cover himself and his family.
Can companies take out life insurance on you without your permission?
They could and did until 2012. They can still do it but have to notify you in writing this is a trick bag too because when you fill out the paperwork to start a job, how likely are you to read the fine print before you sign it?
Just like when you go to a hospital, you cannot see what you are signing they have you sign that small electronic device and “tell you” what you are signing. That should be against the law (hospitals) you could be signing away your right to sue or you may be allowing them to film your surgery or procedure for students and not know it.
As far as any other corporation, READ THE PAPERWORK THEY GIVE YOU, or spend the money and have an attorney read it. If you are allowing someone to tell you “This means that you … ” and they are pointing to the line for you to sign you are playing yourself. You can never trust that. Ask for a few minutes to read it over.
Once someone has your permission, you have little recourse once you sign the papers.
As far as the labels, artists sign a LOT of paperwork, it's up to them to have their own attorney go over that paperwork to interpret what they are signing. Some new artists will sign anything for a record deal and they don't want to rock the boat then years later they claim they were screwed. e.g. TLC and Pebbles.