OUTRAGE
Fallen Soldiers’ Families Denied Cash as Insurers Profit
The package arrived at Cindy Lohman’s home in Great Mills, Maryland, just two weeks after she learned that her son, Ryan, a 24-year-old Army sergeant, had been killed by a bomb in Afghanistan. It was a thick, 9-inch-by- 12-inch envelope from Prudential Financial Inc., which handles life insurance for the Department of Veterans Affairs.
Inside was a letter from Prudential about Ryan’s $400,000 policy. And there was something else, which looked like a checkbook. The letter told Lohman that the full amount of her payout would be placed in a convenient interest-bearing account, allowing her time to decide how to use the benefit.
…As time went on, she says, she tried to use one of the “checks” to buy a bed, and the salesman rejected it. That happened again this year, she says, when she went to a Target store to purchase a camera on Armed Forces Day, May 15.
…Lohman, a public health nurse who helps special-needs children, says she had always believed that her son’s life insurance funds were in a bank insured by the FDIC.
That money — like $28 billion in 1 million death-benefit accounts managed by insurers — wasn’t actually sitting in a bank.
NOT a penny of it is FDIC ensured. One of the “handbooks” omits that information entirely, not that a grieving family would notice the omission.
Read the WHOLE thing.
SHARE the WHOLE thing. How many of us have active duty kids, know someone who does, or, like our own Skyler, are active duty themselves?
Bullshit, my friends. This can NOT stand.
Humanity...or the Lack Thereof, Military Thingies, Morality | tree hugging sister | 
July 28, 2010 11:31 am
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Technically I’m a reservist, but I’ll be on active duty in a very short time before going to Afghanistan early next year.
This is outrageous behavior. Taking advantage of widows and gold star parents is unconscionable.
However, I do have an objection to this comment: “It saddens me as an American that a company would stoop so low as to make a profit on the death of a soldier.”
If they don’t make money off the death of a soldier, then there would be no insurance at all. The whole purpose of an insurance policy is to make money off of the death of other people. It’s just their method of not paying out honestly that is unconscionable.
Oh, I disagree with you COMPLETELY. Profit comes on the monthly payment for the policy, Skyler. That’s the deal an insurance company makes when they underwrite things. In most cases it pays off handsomely, because the vast number of folks live long, lusty lives and the returns in even a meager market on a guaranteed payment (not to mention the vast sums the government pays these guys for “administering” the program IN ADDITION TO those collections) are substantial. Or there’d be no such thing as insurance.
It’s a bullshit play.
I agree, tbs. I just disagree with the blanket statement that insurance companies shouldn’t make a profit
I hate spell checkers. That is supposed to be ths.
Why aren’t some of these people in jail, literally.?
I’m probably not smart enough to figure this stuff out, a fact probably already in evidence, but how did these two frontline clerks know that these checks needed to be rejected on their face?
If it happened in real time AT the store, Yo, my guess is that she just happened to choose stores that do the instant check debit now, like WalMart AND the military commissaries do. No more floating that check ’til payday, puppies! (And doesn’t that make shopping ever so much more pleasurable, trust me.) If your account can’t cover at that instant, it doesn’t fly. Since there wasn’t dime one in that bogus account they gave her, it wouldn’t.
Thank you THS, that seems like a very valid explanation.
Sooo! The federal government wants to make sure that YOU have the five bucks available in your account when you make that purchase at the commissary but seem blissfully free from the ravages of interest that some company has the money available in an account when a gold star parent needs to use the money to which they are legally entitled. What’s not to like. I fully realize that the government cannot assure compliance on everything but this would seem to be an area where there should be a zero fail zone.
It’s a fine print issue that people who are in no position to deal with fine print are faced with. This would seem like the kind of thing that DoD Chaplains and support groups should be aware of, be cause it sounds like the solution is fairly easy. The beneficiary needs to write a couple of checks and deposit them into real and FDIC covered accounts.
Boo on the insurers for taking full advantage, but even more boos for the Congresscritters who could fix this in a heartbeat.
Oh, and I’m shocked that Skyler could call THS something like tbs, a Ted Turner station for heaven’s sake, and not automatically burst into flames. I guess TOWACA security is dead. Hmmm…
The government spent trillions saving dual citizen-ship pinko’s investments so they could buy Swiss chatels and outsource more jobs to China.
Young soldiers don’t count for much in the world of big monopoly money.I’d say the only solution is organize and
invoke the Declaration Of Indepedence and throw the leaders into Sing Sing prison..
There shouldn’t be any darned fine print in situations like this. We just buried a kid from the 82nd Airborne here last Saturday. A good kid who passed on a scholarship to play baseball at the University of Arizona to serve. His parents shouldn’t have to rely on a support group to explain the nuances in some subsection of a subparagraph to an attachment. The Pru is a big organization and, in situations like this, they can bloody well dispatch someone to help them deposit the check into their account or help them wire it in, whatever. Shame on the DoD.