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.
Should Insurance Companies Profit Off Dead Soldiers?
SodaHead 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?
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...
Top Opinion
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patti 2010/07/29 01:49:49
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.
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.
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.
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.
I thought something underhanded was going on, and the families were being screwed over.....again
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!
THAT is what caught my eye in the title .....leading me to read this in the first place.
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.
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....
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.
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 !
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"?
If you don't want them to "hold" the money, Just wright yourself a check.
No Harm , No fail.
If the service member mentioned above has $400,000 life insurance plan, it's through a secondary source.
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.
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
I think Paul said this:
Let no man seek his own, but every man another's wealth.
You are being primed for a calling that will be calling you, but its not God
Augustus go deeper
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