Just when you think things could not get worse financially for some of the families of the fallen:
The package arrived at Cindy Lohman’s home in Great Mills, Maryland, just two weeks after she learned that her son, Ryan, a 24-year-old Army sergeant, had been killed by a bomb in Afghanistan. ...[it was] a letter from Prudential about Ryan’s $400,000 policy. And there was something else, which looked like a checkbook. The letter told Lohman that the full amount of her payout would be placed in a convenient interest-bearing account, allowing her time to decide how to use the benefit.
The letter goes on to say that she could keep the money in that account ''for as long as you like.” But what it didn't make abundantly clear was, she was putting that money at risk by leaving it there. The FDIC does not insure that money, as it is held not in a BANK or SAVINGS account, but in the insurer's GENERAL FUND account.
It's like telling a friend he has $500 coming to him, that you'll hold it, and he can spend it anytime. But you get to keep drawing interest on it. He, doesn't benefit as much as you. Disingenuous, no?
Legal, yes. Deceptive, likely. According to the article, there is TWENTY-FIVE BILLION DOLLARS in funds held in this manner, all of it completely un-insured and completely at risk should the firms fail, or the systems collapse. Yeah, too big to fail, anyone?
Folks, if you are the family of fallen, or know of them, PLEASE, for heaven's sake, get that money changed over to a banking or financial institution where that money is safer, and you can draw more interest. ANYWHERE is better than just letting it 'sit' until you figure out what to do.
It's like leaving your money with the lottery commission- hoping it will be there when you need it. Not.Likely.
You've been warned and advised.