Janitor Insurance for Businesses
Corporate owned Life Insurance policy is a cover designed to help a company manage the losses it incurs in the event of the sudden demise of any of its employees. The cover caters for the financial cost of recruiting and training new staff especially the ones in key positions that require special and expensive training to be able to work.
Initially, Companies only took Corporate Owned Life Insurance, also known as “Dead peasants” or Janitor’s insurance, on the senior executives only, but these days, employers even purchase the cover for general staff.
The unique feature about this kind of insurance is that it can also act as very strategic move by companies seeking to grow a tax free investment because the benefits paid out by the insurance is not submitted to any form of taxing rules.
This type of insurance cover has been in existence for over 100 years. It is believed to have originated from Russia back in the 19th Centre. Just like other life Insurance covers, Janitor’s insurance is one of the most tax advantage tools that companies use to enjoy tax free investments.
In order to limit abuse, there are a number of rules that any company taking such a cover need to adhere to; Firstly, you can only purchase a cover upon supplying the employee you intend to take the cover on with a written notification showing the company’s intentions. The notification should also include how much the cover will cost and whether the company is just a partial or the total beneficiary of the cover, some covers allow dependants of the diseased to be part of the benefits. In some states, a company can only purchase the cover if it is proven that the company stands the possibility of incurring financial losses upon the death of an employee.
Janitor’s Insurance just like other kinds of insurance covers provides the required peace of mind for any business that faces risk of financial losses.