Legion: Prudential accounts 'dishonest'

Legion: Prudential accounts 'dishonest'

The American Legion told a judge yesterday that Prudential Financial Inc.’s practice of collecting interest on unpaid veterans’ life-insurance benefits is “unlawful and dishonest,” according to Bloomberg Business Week.

The American Legion asked permission to file a legal brief supporting a pending case in Springfield, Massachusetts, against Prudential Insurance Co. of America, a unit of Newark, New Jersey-based Prudential Financial.

The pending lawsuit by the families of deceased veterans accuses the insurer of failing to pay beneficiaries in a lump sum as required by U.S. law and the language of the policies. Instead, the lawsuit says that Prudential strongly encourages beneficiaries to keep the money in accounts with the company, which pays them a small amount of interest.

The “practice is unlawful and dishonest,” the American Legion said in its court filing. “It is especially objectionable because sophisticated money managers are making an unwarranted and unlawful profit from the deaths of those who have given the most to preserve our nation’s way of life.”

The Legion feels that beneficiaries should be paid in a lump sum when requested initially – and should be paid immediately, not issued a money-market checkbook – and that no company should be able to retain the earnings on the withheld money while paying the beneficiaries the “going rate” only. In the 1960s, the Legion testified that all death benefits should be handled directly by the government and not by any private insurer.

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Jones57

November 23, 2010 - 11:02pm

This is just wrong and needs to be fixed immediately it's time we take back what is rightfully owed to our veterans.

richie.b

November 7, 2010 - 11:14am

As a recipient of a life insurance policy.(Not SGLI) I was given the same option. I received a letter with several checks. The letter said I could leave it in an account and write checks and draw 3% interest on the balance or write a check for the full amount right away. I could draw out the full amount any time I wanted. My bank was paying 1% on a certificate of deposit and .5% on a saving/checking account. The bottom line is that you have the choice of all at once or as you want or need it. I know that the SGLI comes with a tragic loss to loved ones. They should have a recourse in the military, i.e.JAG or casualty officer to advse them which would best for them

fstop

November 4, 2010 - 4:14pm

yet there are those who say we don't need government regulations. Hmmmmmmmmm

Sooners61

November 4, 2010 - 12:06am

What do they do just wait until the families give up and nothing can be done? It like everything assoicated w/ being in the service it's all a big lie....!

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