Tuesday, August 31, 2010

Beware Of Life Insurance Companies Cheating You

The article in Bloomberg Magazine looked like it was about life insurance companies duping the grieving families of fallen soldiers. But upon closer reading, the life insurance companies are also cheating civilian families. It's worth reading the entire article to get all the details. But I want to give you the heads up so you can protect yourself and your loved ones.

Companies like Prudential Insurance are sending bereaved beneficiaries a checkbook instead of a check for the proceeds of a life insurance policy. The checkbook is for an account that the insurance company makes you think you can draw upon any time you want to buy something. What they don't tell you is that the money is not in a special account at a bank. It is not FDIC insured. And you are not getting the full amount of interest you deserve from leaving the money at the insurance company. In addition, it may be hard to use the checks.

Rather, the insurance company has kept the funds co-mingled with all of its other investments, earning high rates of return for the company. They pay you only a small portion of that return. In other words, they are making money off the money they should have paid you.

It's just plain wrong. I commend the Bloomberg story to you.
 
http://www.bloomberg.com/news/2010-07-28/fallen-soldiers-families-denied-cash-payout-as-life-insurers-boost-profit.html

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