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Should Insurance Companies Profit Off Dead Soldiers?

News 2010/07/29 01:00:00
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Losing a loved one is a shock that all of us will deal with at one time or another in our lives. But losing someone and then finding out you've been manipulated can turn 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. Instead, Prudential keeps their money. Families are surprised when they receive what looks like a checkbook. Prudential promises to hold the money in safekeeping for as long as families would like, saying it will pay them 0.5 percent interest.”

The insurance companies then profit by gaining sometimes 4.5 percent interest on top of that and it's legal, according to Bloomberg. One woman interviewed, whose son had died in Afghanistan, said she was shocked:

"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. Is there anything lower than that?”

Should Insurance Companies Be Allowed to Profit Off Dead Soldiers?

Read More: http://www.bloomberg.com/news/2010-07-28/fallen-so...

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Top Opinion

  • patti 2010/07/29 01:49:49
    No. Death benefits are meant to help families.
    patti
    +6
    My daughter is in the military, currently deployed to Iraq.

    She has no such thing as a $400,000 life policy with Prudential, or Met Life, or any other insurance company.

    Given Bloomberg's left leanings, I'd say this story is anecdotal and that the events described are being made to sound like they are across the board, which they are not.

    All insurance companies have the right to offer this "option" to survivors. What is most important is that the survivors have a right to say "NO" and receive a lump sum payout.

    Consumer need not be victimized, not by insurance companies or by their own ignorance.

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  • morningwood 2010/07/31 08:05:33
    Yes. They should be allowed to make a profit.
    morningwood
    +2
    This question is totally retarded. They want everyone to believe that the money was paid out in this example...it was, read carefully! Besides that, were they aware that the average bank pays LESS than .50% on their checking accounts. Anyone who believes this hooey needs their heads examined.
  • 1472365 2010/07/30 08:10:30 (edited)
    No. Death benefits are meant to help families.
    1472365
    They don't hold a candle to Wal Mart.

    Have you ever wondered why Wal Mart hires elderly people to 'greet' the public?

    Some would say it's just a public relations exercise, and that is part of it, but it's the lesser part. It is about making money in a more direct fashion.

    Wal Mart takes out a fat life insurance policy on the greeter, generally over a million dollars, which is then payed to Wal Mart upon the greeter's death.

    Naturally, the greeter's family is not part of this deal.
  • AngelaTC 2010/07/29 17:00:34
    Yes. They should be allowed to make a profit.
    AngelaTC
    Prudential certainly shouldn't be forced to work for free. All government contractors make a profit.

    The family only needs to write a check for the full amount and they can invest it anywhere they choose to. No one is taking money from the families.
  • Brian 2010/07/29 15:29:53
    Yes. They should be allowed to make a profit.
    Brian
    +1
    This is a dishonest question.
    Should we allow liberal politicians to profit from dead American servicemen?
    Insurance companies are in business to make a profit.
    That is the nature of the business and the relationship between that company and a customer is voluntary.
    It is not clear how a family benefits from someone's death yet the insurance company which sets up the business arrangement is not supposed to?
    Like the mortgage mess, people need to read contracts they sign and understand the nature of the agreement they are entering in.
  • spotdog19 2010/07/29 15:21:08
    Yes. They should be allowed to make a profit.
    spotdog19
    +1
    This is almost a total non sequitor. The person posting this wants us to believe the insurance companies are evil because they offer this option TO EVERYONE and always have.

    I have another one for you...BANKS charge you 4.5% to borrow money for your house but it only costs them 1.5% to get that money themselves from depositors, the Federal Home Loan Bank, etc. Maybe we should close banks too!

    Here's another...MCDONALDS charges us $1.89 for a large soda or french fries and it only costs them about 15 CENTS to buy the product! REVOLT!!! Strike down the evil corporation because they are making a profit!!

    EVERYone almost always has the option to to take care of their own business. They can invest money themselves, they can save money and pay cash instead of borrow and they can grow their own potatoes and make their own fries for a lot less then going out. There's nothing new here, we live in a society where all of these things happen regularly and LEGALLY.

    It seems to me that somebody here is taking a stab at capitalism.
  • Deb 2010/07/29 14:14:19
    No. Death benefits are meant to help families.
    Deb
    This is the first time I have heard of this.....if true, then I am disgusted beyond belief!
  • spotdog19 Deb 2010/07/29 15:23:03
    spotdog19
    +2
    What you're not understanding is that they can write themselves a check for $400,000 at any time and put their money wherever. All they did was open a checking account for them. It's not widely known but most insurance companies also offer many of the same services as banks and have for decades. There's nothing funny going on here.
  • Deb spotdog19 2010/07/30 12:24:37
    Deb
    +1
    I read it wrong then......rushing to read as much as possible in a short time isn't good lol

    I thought something underhanded was going on, and the families were being screwed over.....again
  • spotdog19 Deb 2010/07/31 06:09:26
    spotdog19
    +1
    My best guess is that is the exact intention of the person who wrote this. They took an event that happens routinely, dressed it up with an emotional tie, all in the effort to make it appear dastardly.

    I honestly doubt that the story as related never really happened and that the author, or whomever they lifted it from, doctored it up to have a soldier as the central subject. THAT is what is disgusting!
  • Deb spotdog19 2010/07/31 08:42:37
    Deb
    Agreed. and that last sentence you wrote is a perfect example of disgusting.

    THAT is what caught my eye in the title .....leading me to read this in the first place.
  • DalMil54 spotdog19 2010/08/01 13:55:43
    DalMil54
    +1
    You Must Have Stock In This Company !, This Type Of Biz Is Dispicable ! They Never Told The Family's What They Were Up To, And No It's Not Cool For These Corrupt Companys To Make A Profit Off The Deaths Of American Solders !! It's Obscene !!!
  • spotdog19 DalMil54 2010/08/01 16:50:00 (edited)
    spotdog19
    How do you know what was told to the family? You're assuming facts not in evidence. How do I know...I have been on the receiving end (beneficiary) two different times in my life and I was given several options for payouts. I have personally never dealt with the companies listed but ALL insurance companies are regulated by government agencies and all follow the same basic operation procedures.

    I don't know, maybe you lack the intelligence to do your own investigation; you seem content to rely on ambiguous statements and half truths. The insurance industry is more regulated than most...Bernie Madoff and Enron bilk people out of more than $100,000,000 and you're concerned with companies that actually pay their obligations? Wow...you're a gem.

    BTW, I don't have stock in any insurance company. Until today, I was a licensed insurance agent who never worked in the industry so I am somewhat familiar with the inner workings of an insurance policy. I became licensed 20 years ago when I was working in the Finance Industry and now that I work for myself I no longer need the license and am letting it lapse.

    Knowledge is power. A lack of knowledge is ignorance. You fit in there someplace; I'll let you be the judge of where that is exactly.
  • spotdog19 DalMil54 2010/08/01 17:08:34 (edited)
    spotdog19
    One other question. If in the scenario listed in this story the family had received a check (which is what is usually done, the option listed in this article happens less than 1 in 5 payouts and is the CHOICE of the beneficiary) and deposited that check into a bank money market account earning .50% would you feel better? FYI, the average checking account rate in the US right now is less than .50%.

    You do understand that the bank will then either lend that money out for somebody to buy a car, house, boat, etc. and charge anywhere from 4.00 to 7.00% based on current rates - this is how they make a profit. Banks, Credit Unions, Insurance Companies and McDonald's are all in business to make money (Yes, even Credit Unions make money) - it costs McDonald's about 10 CENTS to get you a large soda they charge you $1.59 for, that's a 1,500% markup. Would you put money into a bank that you knew was LOSING money? Guess whose money they would be losing...depositors!

    Almost all insurance companies offer services similar to banks (call your agent that you have for your life or auto insurance, I'm fairly certain they can open a checking account for you) and a little secret that banks don't want you to know is that Insurance Company rates are as or more competitive than banks or credit unions....

    One other question. If in the scenario listed in this story the family had received a check (which is what is usually done, the option listed in this article happens less than 1 in 5 payouts and is the CHOICE of the beneficiary) and deposited that check into a bank money market account earning .50% would you feel better? FYI, the average checking account rate in the US right now is less than .50%.

    You do understand that the bank will then either lend that money out for somebody to buy a car, house, boat, etc. and charge anywhere from 4.00 to 7.00% based on current rates - this is how they make a profit. Banks, Credit Unions, Insurance Companies and McDonald's are all in business to make money (Yes, even Credit Unions make money) - it costs McDonald's about 10 CENTS to get you a large soda they charge you $1.59 for, that's a 1,500% markup. Would you put money into a bank that you knew was LOSING money? Guess whose money they would be losing...depositors!

    Almost all insurance companies offer services similar to banks (call your agent that you have for your life or auto insurance, I'm fairly certain they can open a checking account for you) and a little secret that banks don't want you to know is that Insurance Company rates are as or more competitive than banks or credit unions. It is for this very reason that many banks have started their own insurance companies or bought existing agencies in the past 10 years. Customers WANT full service and having banking and insurance all under one roof works very well for most people.

    I'm sorry you are so uniformed on issues of finance. Take a couple of hours and do some reading or, better yet, call an insurance agent and talk with them about these things. Then call your bank and talk about similar products and you will get the picture. There is nothing even close to illegal or immoral going on here...is it really that shocking that a company is making a profit? Are you going to go after the COMPANY that makes caskets for service men and women? How about the COMPANY that makes the uniforms that military personnel wear...they are out for a profit as well. The primary purpose of almost every company is to make a profit regardless of who their clients are.
    (more)
  • DalMil54 spotdog19 2010/08/08 14:04:40
    DalMil54
    It Would seem You Are One Of The Lucky Ones, But I Have Read & Heard About Familys Who Were Not Informed In The Way You Have Described.
    And What Gives Any Company The Right To Open Any Account In Any One's
    Name, With Out The Parties Consent ? That Is Tantamount To Idenity Theft !
  • Randice 2010/07/29 13:45:16
    Yes. They should be allowed to make a profit.
    Randice
    I guess I'm confused at what the issue is.. It states: "Prudential promises to hold the money in safekeeping for as long as families would like, saying it will pay them 0.5 percent interest.”

    So what's the problem? "in safekeeping for as long as families would like". So, if God forbid, I got a supplemenal insurance policy and didn't want them to "safekeep it", what's keeping me from saying (should I want or need it) "I'd like it now"?
  • MartinChuzzlewit 2010/07/29 13:18:57
    Yes. They should be allowed to make a profit.
    MartinChuzzlewit
    +1
    That's how Life Insurance payments are made,
    If you don't want them to "hold" the money, Just wright yourself a check.
    No Harm , No fail.
  • DalMil54 MartinC... 2010/08/08 14:07:18
    DalMil54
    The Problem Is: A Local Family Wrote A Check On Their Account & Are Still Waiting For The Money, It Does Not Work The Same As A Bank Check.
  • merlinskiss 2010/07/29 13:14:07
    No. Death benefits are meant to help families.
    merlinskiss
    What does the plan say? Usually there are payout options available to the beneficiaries. But that does not mean it won't happen. Insurance companies are out to do one thing and one thing only, that is to make money off of anyone they can. What do they care if it is off of dead soldiers and their loved ones? Bottom line is, they don't, why should they if it negatively affects their bottom line.
  • mac -Holding Fast 2010/07/29 12:15:42
    No. Death benefits are meant to help families.
    mac -Holding Fast
    The military has a $400,000 life insurance plan called the SGLI. Service Member's Group Life Insurance. It's a military benefit program that does not use MetLife, Prudential, or any others.

    If the service member mentioned above has $400,000 life insurance plan, it's through a secondary source.
  • winterhawk56 2010/07/29 12:05:43
    Yes. They should be allowed to make a profit.
    winterhawk56
    The death gratuity payment in the military is $12,420, and is non-taxable. For those whose death is as a result of hostile actions and occurred in a designated combat operation or combat zone or while training for combat or performing hazardous duty, the payment is $100,000.

    If your talking 400,000 they had a seperate policy with an insurance companie and were paying big bucks for it. So I think the story is B.S.
    I have two sons in the military so yes, things like this are close to home.
  • 1206720 2010/07/29 11:02:06
  • wolfshadow 2010/07/29 09:18:09
  • mac -Ho... wolfshadow 2010/07/29 12:17:07
    mac -Holding Fast
    We have SGLI, we don't use those other companies unless we're buying supplemental insurance.
  • Augustus 2010/07/29 08:31:05
    No. Death benefits are meant to help families.
    Augustus
    Sometimes the cold heart of capitalism if far too cold for my taste.
  • daylight Augustus 2010/07/29 08:47:26
    daylight
    Lies from hell,. insurance is ripped off 24/7 , come on augustus think about it

    Lawyers, hmmm what did Jesus say about lawyers? Remember?

    Woe to You Lawyers who heap burdens upon men
    It is a stinking game and its a shame the lawyers play us
  • Augustus daylight 2010/07/29 09:21:56
    Augustus
    How dangerously low are their profit margins?

    I think Paul said this:

    Let no man seek his own, but every man another's wealth.
  • daylight Augustus 2010/07/29 09:28:13 (edited)
    daylight
    You must go deeper to understand Paul, don't throw away your discernment.
    You are being primed for a calling that will be calling you, but its not God
  • Augustus daylight 2010/07/29 09:30:15
    Augustus
    I don't follow... what, pray tell, do you think I'm being called to?
  • Augustus daylight 2010/07/29 09:34:09
    Augustus
    From what I know of the Lord Jesus Christ, he would not like his followers to discourage each other from following His teachings. I'm pretty sure that is an insult to His sacrifice.
  • daylight Augustus 2010/07/29 09:41:25
    daylight
    Don't throw your discernment away, I am not discouraging the body of Christ, I am warning you,,,,,,,,,,,you must be baptist, so religious

    Augustus go deeper
  • Augustus daylight 2010/07/29 09:52:12
    Augustus
    Yes, Southern Baptist, quite perceptive
  • daylight Augustus 2010/07/29 10:09:35
    daylight
    Wisdom, been there, God said to me at the age of 25, put no label on your self but this " I am bought with the blood of Jesus Christ"

    He set me free from religion , you must seek Him for yourself.
    Augustus, may God come into your life in such a powerful way....but it
    won't be like you think. So look hard and look deep.

    Good morning,,,,,,,daylight
  • Panamanian Trade Shares Group 2010/07/29 08:15:01
  • Toria 2010/07/29 07:54:20
    No. Death benefits are meant to help families.
    Toria
    +1
    That's a very good reason for soilders and others to use USAA for their banking. USAA doesn't runscams on the soilders. If they did they would be out ofbusiness fast. The soliders and familys are their only clients.
  • mac -Ho... Toria 2010/07/29 12:19:48
    mac -Holding Fast
    Also of note- the SGLI is a service member's benefit program. None of those companies perform the function of providing insurance unless it is secondary and purchased by the soldier themselves.
  • daylight 2010/07/29 06:35:03
    No. Death benefits are meant to help families.
    daylight
    +1
    Don't believe it, need more info
  • daylight daylight 2010/07/29 09:00:02 (edited)
  • InTheCity 2010/07/29 06:28:23
  • wolfshadow InTheCity 2010/07/29 09:19:34
    wolfshadow
    +1
    Thank you for your service.
  • InTheCity wolfshadow 2010/07/29 10:17:29

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