Local veterans upset over life insurance policy - KFDA - NewsChannel 10 / Amarillo News, Weather, Sports

Local veterans upset over life insurance policy

Elise Preston
NewsChannel 10

AMARILLO---A national out cry of disgust rises as people learn Prudential life insurance makes money off of dead veterans benefits.  Prudential is the sole provider of life insurance for active duty and recently retired service members.

They provide what's called a retained asset account.  When active duty or recently retired service members die, they're beneficiaries don't receive a lump sum. Instead, they receive the funds through a checking account. The account also allows the beneficiaries to earn interest on the policy.

 Prudential is an insurance company and not a bank so the money is in a pool with millions of other accounts held by the company. While the family may earn 1 percent interest on the death benefits, Prudential could earn about 4 percent. In addition, the money is not FDIC insured.

"Why? Why isn't the government backing the money? They back the insurance companies, they back the banks? Why aren't they backing the Veteran?" questioned veteran and Amarillo resident, Don Seager.

Now the government is stepping in.  According to Prudential's website, the company is in "talks with the Department of Veterans Affairs to address the concerns that have been raised in connection with the Service Members Group Life Insurance Program."

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