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The U.S. Veterans Affairs Dept. and the National Association of Insurance Commissioners say they are reviewing military life insurance arrangements.
It seems that insurance carriers are using the accounts to earn income on $28 billion owed to the families of fallen military personnel.
Read the full story, and weigh in below on what you think about insurance companies profiting from the deaths of service men and women.
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I wonder how many of the families would go through the money quickly, if they chose to receive the full amount--don't they have a choice?
Statistics show that when people inherit or receive a financial windfal it is usually gone within a year. Also, if they invested the money themselves there might be a negative return...or if in a money market account they might recieve less than 1% in today's market.
It might not be such a bad idea to keep the money in a safe place (with the insurance company), get a secure, positive return and have time to think about how to put the money to good use--or have an income for the rest of their lives. I thought I heard that the guarantees for money with insurance policies and annuities were higher than the guarantees for banks with the FDIC...does someone know the answer to this? If so, their money from the life insurance death benefit is safer with the insurance companies.
Of course, if one is a good invester it might be a good idea to invest the money themselves, unfortunately, most people don't get that good of returns on their own.