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pecuniumNo, I'm not happy.
Prudential, and any number of other insurance companies are taking advantage of, one might go so far as to say cheating, the bereaved. Among those are the families of dead soldiers.
What they do is tell the beneficiaries of life insurance policies that their money is in a guaranteed account, earning interest, and can be accessed just as if it were a checking account.
The accounts pay about 4 percent... to Prudential, et al. The beneficiaries are getting, apparently, less than they would if they put it into a regular savings account. Which is all the more galling because the guarantee... isn't really.
New York-based MetLife has told survivors in a standard letter: “To help you through what can be a very difficult, emotional and confusing time, we created a settlement option, the Total Control Account Money Market Option. It is guaranteed by MetLife.”
No FDIC Insurance
The company’s letter omits that the money is in MetLife’s corporate investment account, isn’t in a bank and has no FDIC insurance.
“All guarantees are subject to the financial strength and claims-paying ability of MetLife,” it says.
Both MetLife, which handles insurance for nonmilitary federal employees, and Prudential paid 0.5 percent interest in July to survivors of government workers and soldiers. That’s less than half of the rate available at some banks with accounts insured by the FDIC up to $250,000. (Bloomberg)
Best part of this... the money, the payout someone spent money making sure was there to help their loved ones (one of the strange comforts while I was deployed, was knowing Maia was in no financial worry if I died... she was getting $525,000US, if I was killed. Even after throwing a huge wake, with no one needing to go home, and people from out of town covered for the trip, she was still going to be able to set up shop, doing pretty much whatever she wanted), that money... is vulnerable to MetLife's creditors. Same is true for Prudential, etc.
So the "guarantee" is worth not much.
Worse, the state regulators don't understand these instruments; many of them think they are in FDIC insured banks. More worrisome, the beneficiaries don't understand them, and may think of them as a long-term investment. If they are dormant too long, they may be forfeited to the State.
There are hundreds of thousands, perhaps millions, of of these accounts; they total billions of dollars, and the rightful owners of that money are being cheated of it's benefits.
Really, go read the article. Then complain to your senators, your state insurance commissioner, your congressional rep.
Because this is vile.
What they do to the families of vets... reprehensible. After the shock of losing a loved one, far too young; they are cheated. They get two options, a lump sum for everything, or 36 payments. If they opt for the lump sum, they get this shit.
They could, if they knew about it, move the money (in whole, or in part) into a Roth IRA. The insurance companies don't tell them this. There is a deadline to putting them into a Roth (which is tax free). Why? Because the insurance company wants to get the interest on that money, money they are contractually obliged to pay out; but which they pull a shuck and jive to make it look as though it's been paid, when they keep it in their own coffers.
Bloodsucking bastards, weasling little toads, hiding in the arcana of abstruse phrases in small type; at a time they know the people who read it are not at their mental best. Robbing the dead, and cheating the living.
No, I have little mercy in my heart for them, who use the law as a prybar to wrest pennies from widows and orphans.
Prudential, and any number of other insurance companies are taking advantage of, one might go so far as to say cheating, the bereaved. Among those are the families of dead soldiers.
What they do is tell the beneficiaries of life insurance policies that their money is in a guaranteed account, earning interest, and can be accessed just as if it were a checking account.
The accounts pay about 4 percent... to Prudential, et al. The beneficiaries are getting, apparently, less than they would if they put it into a regular savings account. Which is all the more galling because the guarantee... isn't really.
New York-based MetLife has told survivors in a standard letter: “To help you through what can be a very difficult, emotional and confusing time, we created a settlement option, the Total Control Account Money Market Option. It is guaranteed by MetLife.”
No FDIC Insurance
The company’s letter omits that the money is in MetLife’s corporate investment account, isn’t in a bank and has no FDIC insurance.
“All guarantees are subject to the financial strength and claims-paying ability of MetLife,” it says.
Both MetLife, which handles insurance for nonmilitary federal employees, and Prudential paid 0.5 percent interest in July to survivors of government workers and soldiers. That’s less than half of the rate available at some banks with accounts insured by the FDIC up to $250,000. (Bloomberg)
Best part of this... the money, the payout someone spent money making sure was there to help their loved ones (one of the strange comforts while I was deployed, was knowing Maia was in no financial worry if I died... she was getting $525,000US, if I was killed. Even after throwing a huge wake, with no one needing to go home, and people from out of town covered for the trip, she was still going to be able to set up shop, doing pretty much whatever she wanted), that money... is vulnerable to MetLife's creditors. Same is true for Prudential, etc.
So the "guarantee" is worth not much.
Worse, the state regulators don't understand these instruments; many of them think they are in FDIC insured banks. More worrisome, the beneficiaries don't understand them, and may think of them as a long-term investment. If they are dormant too long, they may be forfeited to the State.
There are hundreds of thousands, perhaps millions, of of these accounts; they total billions of dollars, and the rightful owners of that money are being cheated of it's benefits.
Really, go read the article. Then complain to your senators, your state insurance commissioner, your congressional rep.
Because this is vile.
What they do to the families of vets... reprehensible. After the shock of losing a loved one, far too young; they are cheated. They get two options, a lump sum for everything, or 36 payments. If they opt for the lump sum, they get this shit.
They could, if they knew about it, move the money (in whole, or in part) into a Roth IRA. The insurance companies don't tell them this. There is a deadline to putting them into a Roth (which is tax free). Why? Because the insurance company wants to get the interest on that money, money they are contractually obliged to pay out; but which they pull a shuck and jive to make it look as though it's been paid, when they keep it in their own coffers.
Bloodsucking bastards, weasling little toads, hiding in the arcana of abstruse phrases in small type; at a time they know the people who read it are not at their mental best. Robbing the dead, and cheating the living.
No, I have little mercy in my heart for them, who use the law as a prybar to wrest pennies from widows and orphans.
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no subject
Date: 2010-08-02 02:08 pm (UTC)There is a disparity between the actions of mutual (policy holder owned) and public insurance companies - the mutual companies are, for the most part, held in check by their policy holders. If you insense your policy holders, you will recieve a revolt and the board of trustees won't last long (as, for instance, State Farm has learned a couple of times in its history). Publically-held insurance companies fall into the trap of "Shareholder return" and are easily inclined to do everything to rip off their policy holders up to and including refusing to honor purchased policies.