Washington State Limits Janitor Insurance

Employers in Washington state will no longer be able to own life insurance policies on their rank-and-file workers without the workers’ permission.[@@]

Under a new law signed by Gov. Christine Gregoire, corporate-owned life insurance, often called “janitor” or “dead peasant” insurance, is restricted.

With this type of policy, an employer buys corporate-owned life insurance on workers, often without telling the workers, and names itself as beneficiary. When an employee dies, the employer collects the death benefit, even if the employee has left the company.