U.S. Pays As Prudential Invests Troop Death Benefits
I saw this on broadcast news weeks ago. This story has a bit more background, but – Déjà vu.
The patriotism of the citizen soldier has been reduced to a profit center.
This country has lost it’s way. Citizenship has been reduced to a legal status. Communities have become virtual. For too many, the national motto has become: “In Gold We Trust”. or “Caveat Emptor.” We only partially speak the same language, using conflicting definitions at every turn.
When the Colonies broke away from British rule, we subtly changed the world. When we entered, WWII, we dramatically changed the world. But now, we have lost the grand uniting challenge. Our national character is beginning to reflect the character of our corporations, and that is a sad thing indeed. What is a nation of artificial persons, if not an unfeeling business model?
Do we send our sons and daughters to fight for the right to be bilked and defrauded by corporations? Or do we send them in harm’s way to defend the lives and rights and property of living citizens?
For too long, we have been devolving into a nation of plantation owners and carpetbaggers. The biggest buggy-whip economy in the world.
We are a nation divided. Divided by ideology, by purpose, by principle. Our national identity has become senile. We need to take a cold, hard look at who we want to be, and how we can realistically achieve it. Together. E pluribus Unum.
After a service member dies in combat – including the more than 4,000 who have been killed in Iraq and Afghanistan – the Department of Veterans Affairs sends Prudential the full amount of each family’s life insurance coverage, usually $400,000.
Ninety-five percent of survivors paid by Prudential ask for lump-sum payments, the VA says. Since 1999, the company has sent out more than 60,000 Alliance Account checkbooks, instead of checks, covering more than $7 billion in death benefits when families asked for full payouts.
“Prudential assumes the vast majority of mortality risk for the participants,” he says. “We also assume all of the investment risk.” He declined to elaborate on what the company’s insurance and investment risks are.
U.S. pays as Prudential invests troop death benefits
The problem is that this is not insurance. This is bookkeeping. This is the government outsourcing the payment of benefits to a company that is refusing to honor lump-sum payment requests so they can profit from holding other people’s money.
Terminate the contract. Open it to competitive bidding. Better yet, let the VA handle it. They have the greatest interest in doing it right.
Fraud and abuse like this is why the private sector needs regulation and oversight. It also shows why the government needs transparency, and the country needs a free press.
Read the Article at HuffingtonPost
- Bloomberg Markets: Veterans Agency Made Secret Deal with Prudential over Benefits (eon.businesswire.com)
- Department of Veterans Affairs ‘Asleep at the Wheel’ While Prudential Withheld Lump-Sum Payments to Soldiers’ Families and related posts (nymag.com)
- Dead Soldiers’ Parents Sue Insurers Over Military Benefits (huffingtonpost.com)
- Fallen Soldiers’ Families Are Denied Cash as Insurers Profit (nytimes.com)
- Shift to Wealthier Clientele Puts Life Insurers in a Bind (online.wsj.com)
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