Should Insurance Companies Profit Off Dead Soldiers?

Should Insurance Companies Profit Off Dead Soldiers?

www.sodahead.com

Losing a loved one is a shock that all of us will deal with one time or another in our lives. But losing someone and then finding out you've been manipulated turns grief into anger fairly quickly.

That's how some families feel after they were notified about the death benefits of loved ones killed in combat. According to Bloomberg, insurance companies, like Prudential and MetLife, open accounts and hold benefits owed to family members, including families of people in the military.

"Survivors of service men and women are told they'll get a $400,000 life insurance payout. They don't. I

(visit the link for the full news article)


Related News Links:
www.bloomberg.com
www.npr.org

I HIGHLY RECOMMEND READ THE ORIGINAL BLOOMBERG ARTICLE SOURCED HERE.
FALLEN SOLDIERS' FAMILIES DENIED CASH AS INSURERS PROFIT

IS NOTHING SACRED? Giving The Ultimate Sacrifice = Insurer's Industry Stealing From The BEREAVED Family

JUST BECAUSE THEY CLAIM THEY ARE BREAKING NO LAWS DOES NOT MAKE IT RIGHT.

Please read the Bloomberg Article and forward to everybody

as the Evil One's Reading of The LAW may be FLAWED!!!

Life insurance companies delay issuing death benefits owed to families of service members and others by promising to hold the money in safekeeping, an investigation by Bloomberg Markets magazine found. Senior writer David Evans and Cindy Lohman, whose son was killed in Afghanistan, discuss the findings with NPR's Robert Siegel. Below is a preview of Evans' September 2010 magazine article. Read a transcript of the interview.

Millions of Americans are being duped by life insurance companies that have figured out a way to hold onto death benefits owed to families. MetLife and Prudential lead the way in making hundreds of millions of dollars in secret profits every year on money that belongs to relatives of those who die, an investigation by Bloomberg Markets magazine found. Among the people being tricked are parents and spouses of U.S. soldiers killed in battle in Iraq and Afghanistan.

Survivors of service men and women are told they'll get a $400,000 life insurance payout. They don't. Instead, Prudential — which has a government contract to provide life insurance for military families — keeps their money.
Sample check
Enlarge Courtesy of The Department of Veterans Affairs

Families are surprised when they receive what looks like a checkbook. In documents, Prudential promises to hold the money in safekeeping for as long as families would like, saying it will pay them 0.5 percent interest. What Prudential doesn't disclose is that it is keeping survivors' money in Prudential's own corporate investment account, where the company is earning five to 10 times as much as it pays to families. The so-called checks have JPMorgan Chase printed on them, but they cannot be used as regular checks. Instead, they are to be submitted back to Prudential to get any money

But the money isn't in a bank, and it's not protected by FDIC insurance. None of these facts are spelled out to the survivors; the details are often hidden in fine print.

Nor are families told that they could earn more than twice as much interest by opening FDIC-insured money market accounts at banks across the country. Families of fallen soldiers say they often don't want to touch the "checkbooks" because they view them as payments in return for their sacrificed child. As a result, Prudential holds onto the death benefits, often for a year or more.

"I'm shocked," says Cindy Lohman, a Maryland woman whose son, Ryan, was killed in Afghanistan in 2008. "It's a betrayal. It saddens me as an American that a company would stoop so low as to make a profit on the death of a soldier."

Millions of Americans have unwittingly been placed in the same position by their insurance companies. The practice of issuing so-called "checkbooks" to survivors, instead of paying out lump sums, extends well beyond the military. In the past decade, this tactic has become standard operating procedure in an industry that touches virtually every American: There are more than 300 million active life insurance policies in the U.S. MetLife alone holds $10 billion in death benefit money that belongs to grieving families. MetLife makes $100 million to $300 million a year by investing, mostly in the bond market, money that belongs to survivors.

Insurance companies say they're providing their customers with a service. Prudential's checkbook accounts are helpful to families of soldiers, says company spokesman Bob DeFillippo.

"For some families, the account is the difference between earning interest on a large amount of money and letting it sit idle," he says. (Read a statement from Prudential.)

MetLife spokesman Joseph Madden says his company's customers are very happy with the system.

"The feedback from customers has been overwhelmingly positive," he says. "We afford beneficiaries security, peace of mind and time to make an informed decision — while earning interest in the interim." (Read a statement from MetLife.)

How big is the unregulated quasi-banking system operated by insurers? There are now more than a million of these accounts holding more than $28 billion at 130 life insurance companies.

"It's outrageous that they're profiting off other people's grief," says Mark Umbrell in Doylestown, Pa. His 26-year-old son, Colby, an Army Airborne Ranger who earned a Bronze Star and a Purple Heart, was killed in Iraq in May 2007. Umbrell was among those who got a "checkbook" account. "I think we're being taken," he says.

The question for Umbrell, Lohman and a million others with these accounts is whether anyone will hear their cries. State bank regulators say if there are to be any changes, they should be made by their counterparts at state insurance departments. Officials at those state agencies often say they don't even understand what the insurance industry is doing with these "checkbook" payouts.

Just six states had any rules for retained-asset accounts as of July 2009, according to the National Association of Insurance Commissioners. Arkansas, Colorado, Kansas, Nevada, North Carolina and North Dakota require insurers to disclose fees and interest rates and to tell survivors they may withdraw all of the money by writing a single check. Maryland, which isn't on the NAIC list, also has rules.

Pennsylvania Insurance Commissioner Joel Ario, whose state has no rules for retained-asset accounts, says he has asked his staff to prepare a regulation forbidding insurance companies from using such accounts as the default method of paying a death.

"It's flown under the radar," says insurance law professor and author Jeffrey Stempel. "Regulators have not done their job."

Until public officials wake up, the bereaved will remain a secret profit center for the life insurance industry.

www.sodahead.com
(visit the link for the full news article)

EDIT: To Add Bloomberg Link

[edit on 7/28/2010 by EyeHeartBigfoot]

Excellent find sir, one of the best I've seen in a while.

Never fails to amaze the soulessness of people that design and process these schemes.

reply to post by Gigatronix



And yet the soullessness will continue as it seems the finance industry is forever altering the rules, the laws, the "just because I want to's..." and the I need another Ferrari to impress the whores at their local Gentleman's Clubs'.

The only way this will ever be corrected is to educate the public of their rights and urge them to take immediate action, even in a time of bereavement.

It would also be advisable for our Armed Services to employ liaisons with the sole purpose of helping the bereaved from day one and not just be bearers of bad news.

My last statement may not be completely accurate and there are liaisons helping from day one, if that is the case these liaison officers role in assistance and/or education should be enhanced and expanded.

We are talking about taking care of our fallen heroes and their families.

Just don't have Henry Kissinger on the advisory panel. Never Forget His Regard For Our Soldiers: “Military men are just dumb stupid animals to be used as pawns in foreign policy.” – Henry Kissinger, quoted in “Kiss the Boys Goodbye: How the United States Betrayed Its Own POW’s in Vietnam” by Monika Jensen-Stevenson.

Is this something new? I swear we've been here before.

Originally posted by ~Lucidity
Is this something new? I swear we've been here before.

Hello ~Lucidity,
You honor me by visiting my thread. Hope this thread gets off the ground to expose this data to the many and always enjoy the intellect of your posts.

I found a link to this story on The DrudgeReport earlier today and when searching for additional links to add to OP I could not find any. Not saying there not any earlier reports but I found none in a quick google search.

Best Regards,
t

This has been around for a while..

It is said that companies put life ins policies on employees and when they die the companies get millions sometimes..

Ya it sucks but meh, nothing we can do about it..

Originally posted by ThichHeaded
This has been around for a while..

It is said that companies put life ins policies on employees and when they die the companies get millions sometimes..

Ya it sucks but meh, nothing we can do about it..

If you can find the extra time, would you mind posting some sourcing for earlier reports.

As stated in my reply to ~Lucidity I was unable to locate any additional sourcing and would be interested in further investigating this despicable issue further.

I am very happy you found this thread and advised us that this is not the first time bereavement equals opportunity to play dirty tricks for fun & profit and now we get to add insult to out United States fallen heroes and their respective families.

Great Post!

Michael Moore covered this scheme very well in his film Capitalism: A Love Story..

One of the bits was about the "Dead Peasant" policies taken out by corporations on their employees, insuring them against their deaths and reaping the benefits, unbeknownst to the grieving families.

One family's husband died of cancer and his boss wound up with $5 million. The widow didn't get a cent.

"Dead Peasants." Nice, eh?

deadpeasantinsurance.com...

[edit on 28-7-2010 by thegoodearth]

reply to post by thegoodearth


Thank You for sourcing the Michael Moore - Capitalism: A Love Story movie to my request for more information on this issue.

I have yet to see this movie but I check and can watch on STARZ and/or STARZ OnDemand.

Will watch the movie soon.

Something not right. Making money off of zombies. Obama and pals will take care of them good as far as more regulation required in the insurance companies. It's a clear message: Can't wait until you're dead. You're worth more dead than alive. Death becomes us.

[edit on 2010-7-29 by pikypiky]

This is absolutely ridiculous. This really sounds like the predatory lending practices of the banks in the past. I believe that ignorance of the people in the financial industry are the main cause to issue such as this. Would it be that difficult to require some sort of basic financial instruction in high school. This is not just information that is good for the rich but for everyone so that they understand what is needed to make life better as one ages.

These types of predatory practices really undermine the good intentions that people have when seeking this type of service.

reply to post by who_sright?


DYLAN RATIGAN makes this story his #1 story for today July 30th, 2020. Watch video as he gets a tad heated and uses his interesting dialog to describe these "WEASELING SCUM BAGS"

VIDEO LINK: Dylan Ratigan July 30th, 2020 Expose Life Insurance Profiting From Fallen Heroes

Jones did it today too
thanks for posting it here
it deserves to be front and center.

After world war two people in the Canadian Government hijacked the Metis ( part NDN/euro ) soldiers' pensions for them selves by committing fraud.
some of these soldiers hold records for the whole allied army
most conformed kills of any sniper ever
most lives saved by a medic wwll...
etc

We fought for 40 years till we finally won.
I had my fathers first check for him the day he died.

these people are as low as it gets
ghouls

Anyone know how long this has been going on? I mean, how far back does this go? I remember that soldiers back in WW2 had these, could it have happened back then?

reply to post by EyeHeartBigfoot

Originally posted by EyeHeartBigfoot

The only way this will ever be corrected is to educate the public of their rights and urge them to take immediate action, even in a time of bereavement.

It would also be advisable for our Armed Services to employ liaisons with the sole purpose of helping the bereaved from day one and not just be bearers of bad news.

I've been out of the Navy for almost ten years. I can remember when a close shipmate of mine passed away over 18 years ago. The Navy did have a liaison that came out to his home and explained everything to his wife. This liaison sat down with the wife and explained how the life insurance worked, how the Navy would pay for the funeral and even offered to help her fill out the paper work. Are you saying that the military no longer does this? Or perhaps his commanding officer never sent the liaison to his parents home?

reply to post by darkelf


My husband is a career Marine, will retire in a couple of years.

Yes, after the chaplain and officer come to inform of the death, liason officers sit with the widow/ family, explain everything carefully, and the military will pay for the funeral if the member is active duty while he/ she died, as well as paying for the transportation of immediate next of kin (children, spouse and parents) to the place of funeral.

As far as the exact terms of disbursement of the $400,000 SGLI, I have no idea. (though, it would be simple to just write a check to a Money Market account or your regular bank, etc... for the full amount to tranfer it out of this scheme, if it is fact true, and be done with it).

I do know that they will give money in the interim up to a set amount, and help set up the widow pension as well. Your Tricare insurance will stay in place for the widow until he/ she remarries and for the children until they are out of college or hit age 21.

Of all the companies out there, they really do try to take care of the widows the best they can (though I realize abuses happen a lot, as they do in any other business). Where else will you get this kind of coverage upon the death of a spouse while they are in employ of a company though?

Most places send flowers, send a pitiful collection, and forget your name by next week. Insurance? Forget it.

Originally posted by darkelf
reply to post by EyeHeartBigfoot

 

Originally posted by EyeHeartBigfoot

The only way this will ever be corrected is to educate the public of their rights and urge them to take immediate action, even in a time of bereavement.

It would also be advisable for our Armed Services to employ liaisons with the sole purpose of helping the bereaved from day one and not just be bearers of bad news.

I've been out of the Navy for almost ten years. I can remember when a close shipmate of mine passed away over 18 years ago. The Navy did have a liaison that came out to his home and explained everything to his wife. This liaison sat down with the wife and explained how the life insurance worked, how the Navy would pay for the funeral and even offered to help her fill out the paper work. Are you saying that the military no longer does this? Or perhaps his commanding officer never sent the liaison to his parents home?

From what I can ascertain there are thousands of families just now finding out what exactly has been happening to the soldier's life insurance money.

I honestly can not say if this information is being presented by the liaison but somehow this information is not being made clear to our fallen heroes families.

From the uproar in congress, the house and the media the last couple days, I am hoping that something is done to correct this wrong-doing.

There is now a Class-Action Law Suit in Massachusetts to reclaim the other 4.75% the financial firms kept from the estimated 5.75% earnings.

Both the New York Attorney General's Office and Department of Veterans Affairs have launched investigations into the allegations.

Rep. Linda Sanchez (D) CA who is a Member of the House Ways and Means Committee claims that she will use her position as a member to get something done. The problem with that is NO LAWS HAVE BEEN BROKEN!

The only hope for some resolve is if the investigation can PROVE that the beneficiary was told that the funds were protected and guaranteed. The funds while in the holding of the Insurance Company were not FDIC backed which meant if the financial institution made bad bets in the market, that money is gone and beneficiary would lose they funds.

Our Armed Forces have done their part and now it is time for the citizens they have been keeping free and safe to do our part. We MUST NOT allow this to be swept under the carpet like so many scams before.

Keeping this story alive in the MSM will help in this having a happy ending and more importantly make certain that the scam does not continue to happen.

Find a story online and send it to everyone you know via e-mail, contact your local media, contact your representative and demand there be ramifications -WE MUST just DO Something/Anything or the theft of our money will never stop.

Seriously, with the exception of Bernie Madoff, have you heard of any higher ups ever having to take responsibility for stealing money in this financial crisis?

Thank You for telling us about your experience from 18 years ago - Oh, How The Times Are A Changin'.

I work in insurance and I can tell you most of what this sensationalist thread is spouting is nothing more than half-truths and disinformation.

I'm not sure where you think that magical $400,000 death benefit comes from, but it certainly isn't earned by any one individual over the term of their policy. The only way insurance companies make any money whatsoever IS through investing. But the only thing they are legally allowed to invest are premiums. If an insurance company has 10 policies which would pay out $1MM each on death, the company must have the $10MM in real cash and it cannot be invested in any way.

I don't know what kind of life ins. these people were signing up for but it seems to me those companies are offering the beneficiaries annuities. And unless those insurance policies are specifically tailored for soldiers (Which would be a ridiculously high risk) then almost all exclude death/disability from war.

With any industry there is dishonesty and it seems to me these insurance companies are taking advantage of people's ignorance to insurance. If these companies are indeed investing death benefits then you can be sure it's an annuity. An annuity pays out to an insurance company at around 4-6 pct. With an average 3 pct inflation rate, it's still a marginal profit. I personally find annuities to be quite predatory as some policies can deny refunds should the holder die. Obviously this isn't the case, and those who are owed can still make a claim towards it.

Disclosure is very important in insurance and due to its complicated nature it is important that the company act in the interest of the client. It seems to me these companies are violating their position of fiduciary and taking advantage of people. This is quite illegal and props to everyone fighting who has legitimately been scammed.

But this is in no way reflective of the entire industry either. Insurance is tightly regulated. Seems to me it's one bad apple in the bunch spoiling the rest. I hope their E&O insurance is adequate!

BTW, not sure how it works in the ol' USA, but in Canada the CDIC does not insure insurance companies because they don't deal in deposits/banking. Assuris is the company that does that.

war dead insurance scam

Some of the hit summaries:

# Dead Vets' Families Accuse Insurer of $100 Million Scam ... Jul 31, 2010 ... WikiLeaks Founder Julian Assange on the 'War Logs': 'I Enjoy Crushing Bastards' · Dead Vets' Families Accuse Insurer of $100 Million Scam ... www.commondreams.org/headline/2010/07/31-1 - Cached

# Wall Street's Dead Soldier Problem | Mother Jones Jul 30, 2010 ... Insurance corporations have a new big-money scheme, and new marks: the survivors of America's war dead. ... families are particularly desirable targets for financial and insurance scams, since they're often young, ... motherjones.com/.../military-life-insurance-scam-fraud-prudential-metlife - Cached

# FOXNews.com - Ex-LA mortuary worker guilty of insurance fraud that ... Aug 2, 2010 ... Ex-LA mortuary worker guilty of insurance fraud that included cremating mannequin ... Textile Workers Assist in War Effort. August 02, 2010Mon, ... Is Bill Cosby Dead? No, But He'll Humor the Rumor to Push His iPhone App ... www.foxnews.com/.../ex-la-mortuary-worker-guilty-insurance-fraud-included-cremating-mannequin-cow/

There is a whole lot going on in insurance.
I always figure you buy the insurance and no one else knows
about it and ends up going to no one but the insurance company.
How many times does that happen.