Yeah, I was going to say. This is on top of Google's free, portable, standard life insurance, from a big conservative company. Which even when it's free, is better than any of the life insurance policies people have already mentioned in these comments. And which, if you want to, you can pay extra to upgrade.

Disclaimer: I am not an actuary.

The rules governing Corporate Owned Life Insurance require notification except in the case of highly compensated employees (over $95k/year), according to Wikipedia.

http://en.wikipedia.org/wiki/Dead_peasant_insurance

Looking at it cynically or from the standpoint of cold hard cash - take your pick - it looks this sounds like "dead peasant insurance 2.0" - i.e. an actuarial scheme for the age of blogs and the PR nightmares they can create. When considering life insurance as a financial instrument, Google is in a position to structure the policies in ways which benefit their own bottom line (consult your tax attorney and re-insurance provider for details). I would conjecture that the level of Wall Street analyst outrage over this benefit is probably proportional to the drag the policy creates on Google's gross revenues.

The worst case payout would probably be somewhere around six times annual salary - married, quadruplet infants, and little return on investment over the lifetime of the annuity payments. Actuarially, it may be significantly less across the pool of Google's employees.

The neutral case is an employee with a role that it makes sense to insure anyway, and the death benefit creates only a marginal increase in policy price (one which may well be offset through retention and goodwill).

The best case is zero - no spouse or domestic partner, no kids.

Like many things in Silicon Valley, I suspect that the entire investment is funded by the homeruns. Young employees, such as new college grads, are the least expensive to insure and would generally provide the highest rates of internal death benefit retention and the highest probability of cash value retention due to resignation. By coincidence, this also happens to be a demographic Google recruits heavily.

None of this is to say that this is bad for Google employees - it may in fact be a win-win. Only that it is unlikely to be munificence on the part of Google as the article implies. I suspect that following the money will lead to the bottom line.

I am amazed at how well Google always treated, and still treats its employees. I am even more amazed at companies like Zynga, Amazon and other popular valley companies (both big and small) dont take a leaf or two from Google's playbook, and start treating employees with more respect and give good perks, and spend resources to provide their employees an awesome working environment. The more a company gives, the more it gets from its employees. It is a simple rule. Marissa is prudent and wise enough to know this. Food is free for employees at Yahoo! now. Other execs can learn a thing or two from her.