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Comment by csmeder | Hacker News Reader

So soon as you leave google you have to sign up for a real life insurance plan? At that point you may be too old to get one at a good price. This seems like a sneaky way to scare people from leaving google?

As I understand it at a normal company you pay into a life insurance plan each month from a young age, so that if you take this plan with you to a new company you get to keep the low rate you have earned. With google you loose all your life insurance if you leave Google!

Am I confused or is this a crummy deal?

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Life insurance is not exclusive. You can take out a policy on yourself, and your employer can take one out on you, and you can buy one through your employer, all at the same time. In fact, Wal-Mart has been accused of surreptitiously taking out life insurance policies on its own employees without their knowledge. This allows them to claim and get a death benefit on some of their older, senior citizen employees. Clearly in that case, Wal-Mart being a policyholder had no impact on the employees having their own policies at the same time.

In this instance, Google is providing an additional benefit to its employees (benefits go to them) which doesn't preclude the employee from getting their own policy -- which they should, since they should never have a life insurance policy that is dependent on employment.

In fact, Google gets a good deal in doing so. When they insure their employees, they are doing so with a limited term (a 10 year payout instead of a one-time lump sum), and they are also getting the benefit of a group life insurance policy, which averages out the rates across the insureds rather than on a per-person basis, which would require each employee to endure a physical and a qualification check. Sounds like something other businesses might think of emulating.

I liken this more to a disability insurance benefit rather than something that is used to keep employees committed to the company.

The policies you mention at WalMart are called "dead peasant insurance". There were even investment funds that engaged in betting on the deaths of nearly random people that had little to no connection to those taking out insurance, but about which the investors had more information about their health and longevity than insurance adjusters. These were good investments because the money you put into it in many cases was tax deductible, but life insurance benefits paid out are completely tax free. So the thing in essence was a legal money laundering operation that converted possible taxable corporate profits into completely untaxed death benefits.

Apparently not that great of an investment, tho: http://www.contingentfeeblog.com/2009/05/articles/corporate-...

This seems like a sneaky way to scare people from leaving google?

What, by making "working at Google" better than "not working at Google"?

Scary! How dare they try to take such a nice approach to employee retention.

I posted this before some one said "It's not in lieu of normal life insurance. It's an additional benefit."

If this was in lieu of normal life insurance (Which every major tech company supplies their employees) this would be a crummy deal. And a sneaky way to skimp on life insurance.

If this is confusing I will give you an example.

John works at say Firefox. He is given a 500k life insurance plan as part of his benefits.

Mike works at google and he is given (100k / 2) * 10 as a death plan (but not life insurance).

After 20 years of work John leaves Firefox and Mike leaves Google. Both leave to do contract work.

John's life insurance plan is portable so he is able to keep it by paying a small amount each month.

Mike has no life insurance plan. He has the option to buy one on his own. This is expensive as he is 20 years older now and has medical conditions that he didn't have 20 years ago. It is so expensive that he can't afford life insurance at this point.

John has the exact same condition, but his plan was portable so he doesn't have to pay high amounts each month.

Both John and Mike die a year later due to their condition.

John's family is given $500k. Mikes family gets nothing. And google got away with paying $0 to provide Mike with a death plan. Firefox spent thousands of dollars over the last 20 years to provide John with a portable life insurance plan.

Moral of this story this is why a death plan in lieu of life insurance is crumby. However, it turns out Google is giving away both, so everyone wins :)

You are completely confused.

All the Silicon Valley companies I've worked at give you automatic 2 x salary as a death benefit for free. This is without taking any sort of physical, etc. If you want additional benefits, you need to pay extra per month, submit to a physical, etc.

It seems like instead of the regular 2 x salary, Google is offering 5 x salary for free, which is really great.

Saying it's some sort of scare tactic is preposterous. That's like saying paying people extra is a scare tactic, because they won't be able to make the same amount of money elsewhere.

No.

The Death Benefit is in addition to the Life Insurance.

Death Benefit = 50% Salary for 10 Years. Life Insurance = 300% Salary at Death.

The above is provided for free.

Additionally you can increase the Life Insurance percentage by making additional monthly contributions.

It's not in lieu of normal life insurance. It's an additional benefit.

I think you may be confused.

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