Insurers Hold Billions in Federal Military Death Benefits in Unprotected Accounts
Cindy Lohman, a public health nurse who helps special-needs children, said 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.
It was being held in Prudential’s general corporate account, earning investment income for the insurer. Prudential paid survivors such as Lohman 1 percent interest in 2008 on their Alliance Accounts, while it earned a 4.8 percent return on its corporate funds, according to regulatory filings.
“I’m shocked,” Lohman said, breaking into tears as she learned how the Alliance Account works. “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?”
Millions of bereaved Americans have unwittingly been placed in the same position by their insurance companies. The practice of issuing what they call “checkbooks” to survivors, instead of paying them lump sums, extends well beyond the military.
Jazlowiecki & Jazlowiecki is in the early stages of preparing a class action lawsuit against these insurers. If you would like to be involved, please contact them at once. JazlowieckiLaw@gmail.com
Uncategorized | personal_injury_attorney_connecticut August 3, 2010
