What is janitor, dead peasant, and corporate-owned life insurance?
Corporate-owned life insurance or “COLI” is insurance held by a company on the lives of its employees, or former employees, with the company named as the policy beneficiary. Because the company designates itself as the policy beneficiary, the insurer pays the policy benefits to the company when a covered employee dies. Employees often do not know that their lives have been insured for the company’s benefit. Regrettably, this form of insurance is also referred to as “dead peasant” or “janitor” insurance within the insurance industry. Why is it called janitor or dead peasant insurance? Unlike “key man” insurance which covers important executives, broad-based, corporate-owned life insurance policies generally insure the lives of vast numbers of a company’s employees. It is sometimes called “janitor” insurance because the policies cover everyone from the company’s upper management to its janitors. The phrase “dead peasant insurance” originated from an insurance brokerage firm that included
