VA Unaware of Prudential 'Profiteering' off Veteran Insurance Payouts

I'm glad prudential lost. I'm guessing the prosecution took a loss of earnings in survival actions instead of fraud or blatant profiteering approach. If anything, it was a technical battle more than egregious crimes against families. But the jury made it a losing battle from the start. Even if prudential wins on market rates, present value, contract law, the common man let alone military families do not understand insurance policies. You can take the non-market factors to prove injury.

Ma nishtana - what else is new...

Colonel, and others.... This is a situation that is perceived from many different angles. First off....the amount of monies that Prudential would pay out annually for service member death claims is minimal to the overall value of the company... having virtually no effect on it's profitability.

What I am presuming they are addressing (I spent time at MetLife) is the securing of death benefits in a house savings account on behalf of the beneficiaries. They provided some checks for the account, though not a 'checking account' and the interest runs roughly 3-4%. This is what MetLife always offered... 3-4% is astronomically higher than what the beneficiary could gain throwing it into their local bank savings. As a result, the beneficiary would then have time to make a decision as to how best manage the asset into the future (yes, that is where the Pru folks would LOVE to help). The misnomer that they were 'profiting' was comparing the interest offered to the returns of the company's overall portfolio (usually in the 6-8% range). Funny, once the beneficiary gets the money and puts it in their local bank, yielding .75% with the bank making 10-15% no one has issue.

What fanned this issue was a beneficiary thought that the checks that they received could be used as a normal checking account...when their intentions were to be used to transfer assets once they have made sound decisions regarding the benefits. I would presume that the settlement mentioned was easier to pay out than the risk of bad press trying to explain the situation....as you can see here...five years later and it is coming back to life.

There are lot's of ways to look at this... but this I can add... on the open market, Prudential is one of the only carriers willing to write Life Insurance on services members, and pay on claims where death was incurred in combat. We wrote a young Marine a Prudential policy when he had orders in hand, when no other carrier would take the case.