How the USA Treats Its Fallen Soldiers and Their Families

[GGT]

Burials:

WASHINGTON — Some 6,600 graves at Arlington National Cemetery could be mislabeled, the senator whose subcommittee is investigating potential contracting fraud there said Thursday. The number surfaced at a hearing where former cemetery officials were accused of incompetence, ignorance or fraud.

"We now know that the problems with graves at Arlington may be far more extensive than previously acknowledged," Sen. Claire McCaskill, D-Mo., said in her opening testimony.

"At a conservative estimate," she added, "4,900 to 6,600 graves may be unmarked, improperly marked, or mislabeled on the cemetery’s maps."

The estimate far exceeds one given last month by Army investigators, who examined a small section of Arlington and found some 211 remains could be affected. The review found lax management of the cemetery and a reliance on paper records to manage the burial sites.

"This is not complicated. It's called keeping track of who you bury where. That is not a complicated task," McCaskill told former Superintendent John Metzler and his deputy Thurman Higginbotham.

Metzler and Higginbotham were forced to retire after the review. The report by the Army Inspector General's office accused Metzler of repeatedly failing to ensure burials were being done properly and of failing to respond after unmarked graves were discovered.

McCaskill blamed Metzler for never coming forward after families and employees repeatedly reported problems.

http://www.msnbc.msn.com/id/38467878/ns/us_news-life/


Survivor's Benefits:

Life insurers are secretly profiting from death benefits owed to the survivors of service members and other Americans.....

.....In the past decade, these so-called retained-asset accounts have become standard operating procedure in an industry that touches virtually every American: There are more than 300 million active life insurance policies in the U.S., and the industry holds $4.6 trillion in assets, according to the American Council of Life Insurers.

Insurance companies tell survivors that their money is put in a secure account. Neither Prudential nor MetLife Inc., the largest life insurer in the U.S., segregates death benefits into a separate fund.

Newark, New Jersey-based Prudential, the second- largest life insurer, holds payouts in its own general account, according to regulatory filings.

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.

Bank of New York Mellon Corp. handles the paperwork and monthly statements for customers with MetLife “checking accounts.” The insurance company, not the bank, most recently reported holding about $10 billion in death benefits, in 2008.

The “checkbook” system cheats the families of those who die, says Jeffrey Stempel, an insurance law professor at the William S. Boyd School of Law at the University of Nevada, Las Vegas, who wrote ‘Stempel on Insurance Contracts’ (Aspen Publishers, 2009).

http://www.bloomberg.com/news/2010-0...-soldiers.html


Absolutely pathetic and inexcusable.

[Dreadnaught]

The lack of disclosure is definitely bad, though honestly I struggle to believe someone would think these were FDIC insured fixed-interest deposits when they really clearly aren't. I mean, when someone sends you a pamphlet describing how they are going to hold you money and pay you a flexible rate, but out of money legally entitled to you...it's clearly not a bank account.

What I'm confused about is why so many soldiers had accounts with these kinds of programs? It doesn't seem like a veteran-specific thing, just a way for insurers to hang out to their float for longer in case people didn't know what to do with the money.

[GGT]

Did you read the full Bloomberg report? Total Asset Control is the default. But guess who has the "total control", it obviously isn't the grieving family. They're not made aware they can use a tax-free Roth IRA, because the death benefit "check" isn't really a check.

[Dreadnaught]

Yes, I did. But is this the default for all life insurance policies or somehow just for policies sold to soldiers?

[GGT]

Yes, I did. But is this the default for all life insurance policies or somehow just for policies sold to soldiers?

In this context I only care about the soldiers' policies, and that their families aren't really being well-served by this scheme. They have to do a lot of painful, emotional things when someone is KIA, including signing for a death benefit that might seem like blood money. The last thing they should have to do is be a watchdog for the VA.


Also, why was this tread moved out of GC? I don't plan on visiting D & D since my type of discussions aren't considered a good fit there.....

[Dreadnaught]

I moved it because it's clearly game for a more substantive back and forth.

Which brings me to my question: are you okay with this kind of arrangement for any life insurance policy?

[littlelolligagged]

In this context I only care about the soldiers' policies, and that their families aren't really being well-served by this scheme. They have to do a lot of painful, emotional things when someone is KIA, including signing for a death benefit that might seem like blood money. The last thing they should have to do is be a watchdog for the VA.


Also, why was this tread moved out of GC? I don't plan on visiting D & D since my type of discussions aren't considered a good fit there.....

To me this sounds like you are perfectly comfortable exploiting dead soldiers to further your own agenda, so how can you sit and claim to care about others doing it?

[GGT]

I moved it because it's clearly game for a more substantive back and forth.

I thought the same about my other threads, too. It was "suggested" I stay in GC.

Which brings me to my question: are you okay with this kind of arrangement for any life insurance policy?

Depends on what the policy buyer bought, or understood they bought. Sounds like the military hasn't done a very good job of explaining the benefits to anyone, that insurance commissioners and regulators haven't paid much attention (they also thought these TAC accounts were FCIC protected), and even the VA has dropped the ball.

Adding insult to injury, they can't even get a proper burial. Using 3 X 5 card catalogs to keep track, "losing" ashes and urns? There are some 70 sections, with an accounting of only 3, and already over 6,000 have been identified as misplaced!

[GGT]

To me this sounds like you are perfectly comfortable exploiting dead soldiers to further your own agenda, so how can you sit and claim to care about others doing it?

My "agenda" is exposing and complaining about the treatment of dead soldiers and their families, the abject failure of the VA to have the highest standards for those who made the ultimate sacrifice for our country. I find it disgusting. Between the burial fuck ups and life insurance exploitation, let's add the reports of Walter Reed's sub-standard conditions to the list. Plus, the abysmal treatment (ie, denial) of PTSD or chemical exposures.

[Hazir]

It really annoys me when people start whining about not having an insurance for some investment product AFTER they signed the dotted line. Is it also strange that I wonder how people figure out that the person in the grave isn't the same as the person on the headstone?

[Aimless]

Does it cost the insurers or the army any significant amount of anything to make sure that everyone knows what's going on? Ie. to make sure everything is as simple and as clear as possible for all parties involved? Or to make sure that they know where they put their dead

[Khendraja'aro]

It really annoys me when people start whining about not having an insurance for some investment product AFTER they signed the dotted line. Is it also strange that I wonder how people figure out that the person in the grave isn't the same as the person on the headstone?

The latter thing is easy: Missing tombstones, burial ceremonies with the wrong person in the casket on a regular basis, and generally enough irregularities to warrant an investigation which the finally yields the tally.

[GGT]

It really annoys me when people start whining about not having an insurance for some investment product AFTER they signed the dotted line. Is it also strange that I wonder how people figure out that the person in the grave isn't the same as the person on the headstone?

This isn't "some investment product". The military pays a Death Gratuity of $100,000 lump sum payment for soldiers KIA. The Servicemembers Group Life Insurance charges a small premium up to $250,000 for life insurance....then the government pays for extra coverage up to $400,000 for soldiers wounded/killed in combat. It's supposed to be offered as a lump sum. Consider it post-humous Hazard Pay.

edit: What Khen said. When a family shows up at Arlington for a burial or visitation, and is told "the cemetery can't locate the remains", or finds out cremated ashes were buried in a huge plot for Unknown Soldiers.....people tend to feel angry and betrayed.

What annoys me is people acting like this is no big deal, and anyone else is whining.

[LittleFuzzy]

I thought the same about my other threads, too. It was "suggested" I stay in GC.

I didn't "suggest" you confine yourself to GC, you said we should split debate and discussion in two so you could have a place for rambling discourse and I said that sounded exactly like what GC was for.

[LittleFuzzy]

Is it also strange that I wonder how people figure out that the person in the grave isn't the same as the person on the headstone?

It looks like it started with unlabeled graves.

[Hazir]

This isn't "some investment product". The military pays a Death Gratuity of $100,000 lump sum payment for soldiers KIA. The Servicemembers Group Life Insurance charges a small premium up to $250,000 for life insurance....then the government pays for extra coverage up to $400,000 for soldiers wounded/killed in combat. It's supposed to be offered as a lump sum. Consider it post-humous Hazard Pay.

edit: What Khen said. When a family shows up at Arlington for a burial or visitation, and is told "the cemetery can't locate the remains", or finds out cremated ashes were buried in a huge plot for Unknown Soldiers.....people tend to feel angry and betrayed.

What annoys me is people acting like this is no big deal, and anyone else is whining.

Are you telling me I am wrong in assuming this is really about what happens to the money AFTER it has been paid out?

[GGT]

Are you telling me I am wrong in assuming this is really about what happens to the money AFTER it has been paid out?

I think you're mistaken about what's happening with the money---it's NOT being paid out, it's being held in the insurers own corporate accounts. The beneficiary gets a "checkbook" to make it look like they can draft on the account, but they can't (because the money is not actually there, it has to first be transferred to the bank, that's why the woman's checks bounced).

The insurer is paying a 1% interest rate to beneficiary, while making up to 5% profit for their corporate account. It's not like they paid a lump sum and the family deposited it into an interest bearing bank account or mutual fund. MetLife and Prudential aren't banks or bank holding companies. Mellon just prints their bank name on the "checks" and sends out statements, the money isn't actually at Mellon banks.

It's not FDIC insured---think about that a minute. All those billions of dollars guaranteed to deceased soldiers' families (as well as federal retirees) under congressional act is being "held" by Prudential or MetLife to use as their corporate investment tool. If the money is lost or gambled away, yet they had to pay out lump sums to everyone owed, what do you suppose would happen? Remind you of anything? They'd have to run to congress for a bailout with tax payer monies.

Bloomberg report says the insurers aren't even following Mutual Fund accounting rules, and may be in violation of federal banking laws. It's not like the soldier can choose who their life insurer is---they have a a government contract to be the sole providers. Yes, they can sign an opt-out clause, but only 8% of all people do.

[Dreadnaught]

Keeping in mind that I don't think this is good business practice at all, you're acting like money is being actively stolen. The money is available to be transferred to one's own account at any time. According to MetLife, 72% transfer their money somewhere else (or spend it) within two years. And Bank of New York says that 60% is withdrawn/transfered within a year.

They have to put the money somewhere until the policy beneficiaries tell the insurers where to send it -- where they have gone wrong is making this product to hold the money and not adequately describing how it's being held.

But to be totally clear, a life insurance policy isn't a guarantee either. Every policy is subject to the ability of an insurance company's ability to actually pay it out.

[GGT]

They could just cut a check and send it to the beneficiary, insurers don't have to 'park' it somewhere. At the very least, the beneficiaries are being misled. You're acting like this is "business as usual".
NY's AG, the VA, and DoD disagree....

New York AG: Insurance firms defrauded military families of millions
By the CNN Wire Staff
July 30, 2010 11:30 a.m. EDT


New York (CNN) -- New York Attorney General Andrew Cuomo is launching a fraud investigation into the life insurance industry for "practices that appear to have denied grieving military families and others of millions in life-insurance cash," Cuomo's office announced Thursday.

The attorney general's office said it appears some insurers tell families of fallen military personnel that policy payouts will be placed in an interest-bearing account. But the bulk of the interest benefits the insurers, and the cash is not placed in banks insured by the Federal Deposit Insurance Corporation (FDIC), Cuomo's office said.

"It is shocking and just plain wrong for these multinational life insurance companies to pocket hundreds of millions in profits that really belong to those who have lost family members and have already suffered immensely," Cuomo said.

His office said insurers place cash in their corporate accounts, reportedly earning up to 4.8 percent interest while paying families as little as 0.5 percent interest.

Subpoenas have been served on eight insurance companies -- Prudential Financial Inc., MetLife Inc., Genworth Financial Inc., UnumProvident Corp., Northwestern Mutual, Guardian Life Insurance Company of America, New York Life Insurance Co., and the MONY Life Insurance Co. -- though the entire life insurance industry is under investigation, according to the attorney general's office.
The accounts in question include Prudential's Alliance Account and MetLife's Total Control Account.

In a written statement, Prudential Chairman and CEO John Strangfeld said, "It is important that the beneficiaries of our fallen service men and women are treated with dignity and respect during a very difficult time. Given the questions raised over the life insurance program we administer for the Department of Veteran Affairs, we welcome an opportunity to address the concerns and to set the record straight."

Prudential said that while the accounts in question are not FDIC insured, the accounts are protected by state guaranty funds that provide protection of at least $250,000 in most states.
"Prudential does not in any way take money from beneficiaries," the company said.

In a written statement, MetLife spokesman John Calagna said Thursday he has not seen Cuomo's subpoena and therefore had no comment on it.
"However we strongly disagree with many misleading statements in recent media reports and want to be clear regarding several important features of MetLife's Total Control Account ('TCA')," Calagna said.

He said MetLife is not the issuer of the Service Employees Group Life Insurance program provided to members of the armed forces, but the company does provide life insurance policies for civilian federal employees under a program called Federal Employees Group Life Insurance.

"Our materials carefully explain the TCA to our customers so that they understand that they can use their checkbooks to withdraw all of their benefits immediately or over time as they choose," Calagna said. "They have full access to their funds and earn a guaranteed minimum interest rate that exceeds what they could earn on most money market accounts."

Cuomo's office said Prudential beneficiaries receive what appears to be a checkbook with "JPMorgan Chase & Co." on the "checks," but said the so-called checks cannot be used to make purchases and are not bank checks at all.

"Instead, Prudential must send money to JPMorgan Chase before the checks can clear," the attorney general's office said. "Prudential beneficiaries are also not informed that, under a 2008 law, they have one year to place the death benefits in a Roth IRA and earn tax-free investment gains for the rest of their lives. Thus, real financial harm is suffered by Prudential's lack of disclosure."

Prudential said more than 40,000 Alliance Account drafts cleared last year, and the company receives few complaints from beneficiaries about difficulties.

Secretary of Defense Robert Gates said he learned Thursday that families of deceased military members did not get a lump-sum payment for life insurance policies.

"Until today, I actually believed that the families of our fallen heroes got a check for the full amount of their benefit," Gates said during a briefing at the Pentagon. "So this came as news to me. And so I will just say I will be very interested in the outcome of" an investigation.

The Veterans Administration said it is conducting "a full investigation" to make sure survivors are fully protected and being treated with care and respect.

"The possibility that life insurance companies may be profiting inappropriately from these service members' sacrifice is completely unacceptable," the VA said in a statement. "VA is deeply concerned that military and veteran families may potentially be harmed in some way by the use of the Alliance Account program."

At the conclusion of the investigation, the VA said, the agency will determine whether to continue use of the Alliance Account program. The VA also will contact the approximately 10,000 survivors to remind them of their options under the Service Employees Group Life Insurance program.

[Dreadnaught]

They do have to park it somewhere, you don't just cut someone a giant check when they've lost their child/parent in combat. That's immensely irresponsible and could lead to accidental and enormous tax liabilities. It's almost as irresponsible as not being clear about where the money is being parked while you consult an expert about how to handle the money.

[GGT]

Then the insurers could deposit it in REAL bank accounts that are FDIC insured @ $250,000 each, until they've gotten financial advice. Automatically parking it in an insurer's corporate account without FDIC protection, sending out checkbooks that aren't really draft accounts, that is deceptive. The gist here is that everyone from DoD to the VA, soldiers to families have been duped, and weren't aware of what's been happening until the Bloomberg report.

(It's not that an entity is making profit from the spread yield, all depository and lending banks do that and everyone knows that.)

No idea why you're so readily defending the practice Dread, when vulnerable and grieving families aren't being served well this way.

[Dreadnaught]

Insurance companies can't open bank accounts in other people's names. That's fraud.

For the third time, I'm not defending the practice. I think the disclosures are immoral and possibly deceptive. But I'm trying to explain how there is a nuts-and-bolts layer to this I think you're missing.

[GGT]

Yes, it's the lack of disclosures that's troubling. No need to overly nit-pick my words about depositing checks into FDIC accounts of beneficiaries choice.

The VA hasn't done a very good job on behalf of KIA, either. Not in the contracts with these insurers, nor the management of their burials.

[Lewkowski]

FDIC insurance is really not that important. I mean honestly it doesn't sit right that the insurance company is profiting off of that money but its hardly as heinous as you make it out to be. They can take the money out at any time.

[GGT]

FDIC insurance is really not that important.

Tell that to depositors of the 100+ US banks that have failed this year.

I mean honestly it doesn't sit right that the insurance company is profiting off of that money but its hardly as heinous as you make it out to be. They can take the money out at any time.

Then it would have been no problem for full and clear disclosure, letting the beneficiaries decide. Nothing hidden in small print or calling non-checks "checks". Of course, they'd most likely move their money to FDIC insured banks, money market fund or tax exempt Roth IRA.

Selling this as safe and offering 0.5% interest for dead combat soldiers' lives is disgusting.

[Hazir]

I would be more concerned about how my country treats it's un-dead soldiers really.