Queen Victoria was more than just a monarch. She was the matriarch of the British Empire, a cultural leader, and shrewd political mind whose cunning and diplomacy kept a continent in peaceful prosperity.

Following the Queen’s death in 1901, the London theatre company of Engelbach & Greet collected on a life insurance policy in the Queen’s name. I realize that might sound surprising — but it was simply a matter of business.

After all, the Queen’s death would send shockwaves through the empire. London especially would spend weeks, if not months beset with grief. No one was going to be in the mood for a play, and an extended decline in ticket sales could potentially put the theater company out of business. So when the queen passed, their policy paid out £5,000 at the time, worth nearly half a million pounds at today’s rates.

Engelbach & Greet had what’s called an “insurable interest” in the Queen’s survival. The same would be true of any organization that could consider the monarch to be their business partner. In total, it’s estimated that insurance companies paid off an estimated quarter-million pounds, or £21.5 million in today’s dollars, to various businesses with insurable interests in the queen’s survival.

That amount of money may have kept dozens of prudent businesses from being forced into bankruptcy. It probably also helped successful entrepreneurs retain their best talent even through an unexpected downturn.

This is an often-misunderstood facet of life insurance that can sound a little morbid on the surface.

Indeed — it seems like every five or ten years, some bright-eyed investigative journalist will “discover” the concept of insurable interest all over again, warping it into some sensational new headline.

Back in 2002, the Wall Street Journal published an article on what they called “Dead Peasant Insurance.”

In 2014, the New York Times delivered a sizzling story about how “An Employee Dies, and the Company Collects the Insurance.”

The in 2025, Bankrate decided it was time to run back the “Dead Peasant Insurance” line.

It’s all just clickbait sensationalism, run over and over again to boost views and marketing income. Corporate-owned life insurance (COLI) certainly exists, but it’s strictly regulated and frequently requires the consent of the employee.

Personally? I’d love to see any of these reporters tell Queen Victoria (or her descendants) that her many life insurance policies were “Dead Peasant Insurance.” Truly.

The simple reality is that some employees and business partners are truly indispensable.

It’s not unusual for entire businesses to be built around the talents of one or a handful of people. As a result, it makes perfect business sense to take out insurance on those individuals. Sometimes even just parts of individuals.

Rolling Stones guitarist Keith Richards famously had is hands insured for $1.6 million. Miley Cyrus has her tongue insured for $1 million. Michael Flatley, the “Lord of the Dance” even had his legs insured for an alleged 20 million pounds!

If a particular VP or top team member is worth millions of dollars a year in sales, then that person’s sudden absence could have a lasting negative impact on your family. Just like the unexpected passing of a family’s breadwinner could wreak havoc on their future prospects.

It’s all the same principle, whether the beneficiary of a policy is a family member or a close business associate. It’s all a matter of insurable interest.

When it comes to corporate-owned life insurance, a company’s employees and executives will often be required to consent to life insurance arrangements. But they’re often the most excited about it…

It’s true that some of these policies have historically benefited the employer. But life insurance is also frequently used as a kind of “luxury 401(k)” to provide unique and interesting benefits for folks who otherwise have it all.

Policies may or may not name the company as a beneficiary. In some cases, the company will contribute premium payments with the agreement to receive those payments back upon the death of the executive.

Life insurance contracts are extremely flexible in nature (subject to jurisdictional laws), which makes them a unique vehicle for both compensation and securing a company’s future profitability. They also provide unparalleled protection from creditors, massive tax advantages and a truly unique income opportunity.

“Split-dollar” life insurance has long been a popular choice, allowing both the employer and employee to share the costs of the policy while either providing an economic benefit to the employer, or an advantageous loan to the executive.

Another popular choice for employee life insurance recently is the “Section 162 bonus plan.”

With this type of plan, the employer takes out a life insurance plan on the employee. The employee is allowed to determine the plane’s beneficiaries, but the premiums are paid via scheduled bonuses from the employer.

This allows the employee to fund a whole new life insurance policy independent of their existing income, while providing a host of key tax benefits on bonus payments that might otherwise be taxed quite heavily.

Some employee life insurance plans can be set up to restrict an employee’s access to the cash value of their policy until a specific date (like retirement age), which can work as a type of “golden handcuffs” to keep a prized employee on the payroll for as long as possible.

Section 162 bonus plans can also be tied to performance, incentivizing a company’s most successful employees by helping them grow an asset that’s effectively tax-free. The resulting polices have all the typical benefits you’d expect from whole life insurance policies — including living benefits like self-banking and a practical volatility buffer to guard their growing wealth.

Corporate-owned whole life insurance can be a unique and powerful business asset, even and especially for the smaller businesses and entrepreneurs who’d ultimately make the most out of whole life insurance’s unique business advantages.

After all, whole life insurance is a great benefit for Fortune 500 executives. They might borrow against your policy’s cash value to finance the next boat purchase.

But the same kind of funding access for a small business could mean the difference between life and death in a bad market. And the outstanding creditor protection will help you sleep better at night. And the substantial death benefit could help ensure a business outlives any one of its partners.

Key Takeaways

• Insurable interest is crucial for life insurance, ensuring policies benefit those with a legitimate financial stake in the insured individual’s survival and continuity.
• Corporate-owned life insurance (COLI) can protect businesses by cushioning financial shocks from losing key employees or partners, supporting business continuity and risk management.
• Life insurance for high-value individuals or key team members preserves wealth by safeguarding against unexpected loss and providing liquidity to sustain enterprises or families.
• Policies like “split-dollar” arrangements and Section 162 bonus plans offer flexible compensation tools with tax advantages, attracting and retaining top talent in businesses.
• Whole life insurance serves as a unique wealth-building vehicle with creditor protection and income opportunities, beneficial both for large corporations and small businesses alike.
• The legacy of Queen Victoria’s insured interests illustrates the broad and sometimes misunderstood role life insurance plays beyond personal protection, extending to business stability and economic resilience.

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