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Parents Of Deceased Soldiers Sue Over Handling Of Life Insurance

alison — Tue, 31 Aug 2010 16:23:52 +0000

Five additional parents of US soldiers killed during duty have joined with another parent in a lawsuit against Prudential Financial. The suit claims Prudential profited from the dead soldiers’ policies by paying only a small amount of interest on life insurance benefits while holding on to a large portion of interest themselves. According to a report by the Associated Press, the families say bookkeeping misrepresented how the insurance beneficiaries could collect lump-sum payouts.

The case could eventually impact tens of thousands of soldiers’ beneficiaries who received payments. The Associated Press reported that company officials couldn’t address the current legislation, they say they are handling money properly. The suit deals with Alliance Accounts which are similar to checking accounts. Beneficiaries can write “checks” to receive some of the insurance money or they can get 36 equal payments each month. If they opted for the Alliance Account, beneficiaries received interest rates ranging from .5 to 1.5 percent. But the soldiers’ families say Prudential actually holds the money in a general account worth $2 billion and that the company earns five to six percent interest. Then they say the company keeps the difference.

“They didn’t tell anybody, ‘We’re going to make money with it,’” Cristobal Bonifaz, one of the plaintiffs’ attorneys told the Associated Press. “What we’re saying to Prudential is, ‘You kept investing the money, but that money did not belong to you as of the day that person died, and whatever you made off it, you should give to those persons it was meant for.’” Bonifaz believes the money Prudiential made off the soldiers’ money could range from a few thousand dollars up to $30,000.

Prudential spokesman Bob DeFillippo told the Associated Press that the interest rates are comparable to checking accounts and the money is handled this way so that it’s easily accessible. “This is a very, very difficult time for (beneficiaries) and we do everything we can to make this not any more difficult … If their intent is to have a lump sum, all they need to do is write a draft to themselves and withdraw it,” DeFillippo told the Associated Press.

Parents Of Deceased Soldiers Sue Over Handling Of Life Insurance is a post from: Peppercoin Insurance

Investigation Looks Into Life Insurance Policies Of Fallen Military

alison — Sat, 31 Jul 2010 00:36:17 +0000

Many families of fallen military members may be the victims of fraud, which is why New York Attorney General Andrew Cuomo is calling for an investigation. According to CNN, Cuomo’s office released details of the new investigation saying they’re looking into “practices that appear to have denied grieving military families and others of millions in life-insurance cash.”

Officials say that some insurance companies are telling families of late military personnel that they’re putting life insurance policy money into an interest-bearing account. But what really happens, according to some officials, is that the insurance company is benefiting from most of the interested earned– some times taking as much as 4.8 percent while the families receive just .5 percent of the interest. Another issue Cuomo is raising is that the insurance money is being put in banks that are not insured by the Federal Deposit Insurance Corporation, or FDIC. “It is shocking and just plain wrong for these multi-national 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 told CNN.

Officials say the accounts being targeted in the investigation include Prudential’s Alliance Account and MetLife’s Total Control Account. However, the attorney general’s office says they’re looking into the entire life insurance industry. According to CNN, Prudential’s Chairman and CEO John Stangfield released a written statement saying, “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.” Stangfield denied doing anything wrong. “Prudential does not in any way take money from beneficiaries,” the company said according to CNN.

MetLife also commented. According to CNN the company’s spokesman John Calagna released a written statement saying, “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’). 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 told CNN. “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.”

Secretary of Defense Robert Gates told CNN he had no idea many military families were being treated this way. “Until today, I actually believed that the families of our fallen heroes got a check for the full amount of their benefit,” Gates told CNN during a Pentagon briefing. “So this came as news to me. And so I will just say I will be very interested in the outcome of an investigation.

Investigation Looks Into Life Insurance Policies Of Fallen Military is a post from: Peppercoin Insurance

Michael Jackson’s Life Insurance Only Small Portion Of Post-Death Income

alison — Fri, 25 Jun 2010 15:17:15 +0000

In June of 2009 Michael Jackson was preparing for a comeback tour under a massive pile of debt. His home was about to be foreclosed on, and even utility bills weren’t being paid. But then on June 25, 2009 Michael Jackson passed away, a drug-related homicide according to authorities.

While the world will never know what kind of money Jackson could have made through his latest tour, in death he has brought in millions. According to CNBC Jackson’s estate has brought in nearly $275 million in the past year. That money has come from sales of everything from ring tones to merchandise. Debts have dropped to $400 million, down from $500 million before Jackson’s death. And the home that once faced foreclosure has been paid for in full.

Jackson’s life insurance policy wasn’t enough to pay the estate taxes, much of which still has to be paid according to reports. Two men– John Branca and John McClain– have been responsible for making sure Jackson’s wishes are met, his charities receive funds and his children are cared for. Both Branca and McClain knew Jackson for years and say Jackson was focused on getting his financial life in order just before his sudden death. “We had seen Michael the week before,” Branca told CNBC. When Jackson died, Branca added, “It caught us by surprise,” but as CNBC reported, they were able to move forward with managing the estate because, “We had a game plan.” That plan, according to CNBC included four main goals:

1. Generate a lot of short term cash to pay bills.

2. Establish long-term projects that would generate regular cash flow.

3. Restructure debts.

4. Help Jackson improve his image.

So where is Jackson’s money coming from in the 12 months since his death? Only a small portion came from life insurance. The biggest segment was $125 from Sony in a 10-album deal that will take place over the next seven years. Another big chunk, $60 million according to CNBC, also came from Sony for the rights to “This Is It,” the film that grossed $300 million in the box office. Other funds have come from Mijac Music Publishing which owns the rights to Jackson’s songs, merchandise sales and book revenues. There are more projects in the works, but experts say this year may have been the estate’s most lucrative.

Michael Jackson’s Life Insurance Only Small Portion Of Post-Death Income is a post from: Peppercoin Insurance

Businesses Taking Out Life Insurance On Key Employees

alison — Thu, 10 Jun 2010 16:23:23 +0000

According to a new report by Inc, life insurance policies aren’t just for protecting families. They’re helping businesses too. If your business burns down you’re likely protected by insurance. But what if your key employee dies? Life insurance policies are a tool for small businesses who risk losing someone that is key to the success of their company. “Depending on the type of insurance you purchase, the ownership structure, and beneficiary of the insurance, life insurance can provide financial protection, risk management, and asset protection,” says Josh Patrick, in an Inc report. Patrick is the founding principal in Stage 2 Planning Partners, a financial-planning firm that helps businesses.

These types of insurance policies can help during this time of transition. They can be used to hire new help or just keep the lights on and the doors open, according to experts. “The goal should be if in the event of the death of a major shareholder or other key person that the business can be able to continue with minimal financial interruption,” says Matt Tassey, according to Inc. He’s the past chairman of a nonprofit that helps people make smart insurance decisions. “You can’t do anything about the human interruptions,” Tassey told Inc. “But you can make sure the doors stay open, the light bill gets paid, and the mortgage gets paid.”

Deciding whether to purchase life insurance for your business can be a tough decision. Every business owner knows there are dozens of ways to spend extra money, but it’s important to weigh out the decision carefully. Think about what would happen if the company lost key employees and whether it’s a change the business could survive. “Insurance is to insure a risk that you can’t afford, so if in your business one of your key people were to die, what would it cost you to replace that person? If you were to die, what is the chance for your business surviving? And what kind of impact would that have on your family?” Patrick told Inc. “If it’s more risk than you can afford, then protect yourself and your business with insurance.”

Businesses Taking Out Life Insurance On Key Employees is a post from: Peppercoin Insurance

Man Found Guilty Of Killing Child For Insurance Money

alison — Thu, 29 Apr 2010 18:39:08 +0000

Insurance is meant to protect us in the event of difficult moments, but in Washington it’s what drove a man to kill, according to officials. A report by the Seattle Times says that a jury convicted 40-year-old Joel Zellmer in the death of Ashley McLellan. Ashley was just three years old at the time of her death in 2003. Officials say Zellmer told police he was taking a nap when Ashley, his step-daughter wandered into the backyard and fell into the pool. The girl’s mother was at work when this happened.

An investigation showed that Zellmer’s story wasn’t true. Investigators discovered that Zellmer drowned Ashley so he could get the insurance money from a $200,000 policy taken out on her life just three months earlier. Even more heartbreaking is the discovery that this is not the first time Zellmer preyed on young children with hopes of cashing in on insurance money. Prosecutors say Zellmer focused on luring in single mothers he dated so he could target their children.

According to KOMO, firefighters on the scene of Ashley’s drowning noticed something odd right away. They say Zellmer was calm, mostly dry and did not question Ashley’s condition. “One of the things that I remember thinking when I looked at her was that she wasn’t going to make it. You know, she just had that look of…we weren’t going to be able to revive her,” said Capt. Felicia Beluche to KOMO, one of several firefighters and paramedics who rushed to save Ashley McLellan. “(Zellmer) had, in my opinion, a visible detachment from what was happening.” The trial brought other cases to light where children suffered broken bones, burns and a near-drowning.

Man Found Guilty Of Killing Child For Insurance Money is a post from: Peppercoin Insurance

Study: Cost Of In-Home Care Increasing Slowly

alison — Tue, 27 Apr 2010 20:29:03 +0000

Roughly two out of three people over the age of 65 will need long term care either at home, through adult day health care or at an assisted living facility. The study, completed by Genworth Financial also found that long-term care isn’t just for the elderly– 40 percent of those receiving it are between the ages of 18 and 64. The study found that while long term care costs are increasing just like other health care costs, the price for in-home care is increasing at a slower rate. The increase over the past five years is 1.7 percent.

While long term care costs continue to rise nationally, the cost for in-home care is rising at a much slower pace. For many Americans, in-home care could even be their most cost-effective choice. “Long term care is not just about nursing homes anymore. Care options have expanded dramatically over the past several years to include a far greater choice of settings that reflect the ways in which individuals prefer to receive care,” Buck Stinson, President, U.S. Life Insurance Products at Genworth, said in a news release.

According to the study, receiving at home care may be more affordable than other options. Five years ago the median rate for a private nursing home room was $60,225 a year. In 2010 that has increased to $75,190. However, rates for a home health aide have increased from $17.50 an hour in 2005 to $19 an hour in 2010. The survey found that Alaska, Minnesota and Rhode Island are the most expensive states for receiving home care. The median hourly rate for an aide there is $25. Compare that to the least expensive states of Alabama and West Virgina where the same services will cost just $15 an hour.

Study: Cost Of In-Home Care Increasing Slowly is a post from: Peppercoin Insurance

Need A Job? Consider Selling Life Insurance

alison — Sat, 20 Mar 2010 16:02:06 +0000

It may seem hard to believe, but life insurance salesmen are a hot commodity. Lots of companies are adding thousands of them to their payroll including an additional 3,618 agents at New York Life Insurance Co. and 2,340 agents at Northwestern Mutual Life Insurance Co. according to a report in the Wall Street Journal. Why the sudden run on jobs that so often are the punchline of jokes? With the economic crises, many people are now wary of the stock market and they’re looking for another investment with more and more turning to whole life insurance policies.

With many people out of work, selling insurance is a job they can begin fairly easily even though a few years ago they may not have considered it as an option. But it’s definitely not a get-rich-quick job. Statistics from research firm Limra show that 70% of agents earn less than $35,000 in their second year on the job. And sticking with it isn’t very common. Fewer than one out of five new agents are still selling insurance four years later. “You have to step a little out of your comfort zone,” says 48-year-old Catherine Calise, who started selling insurance for New York Life after ending her 18-year real estate career. “I’ll be in line at the grocery store, picking up dry cleaning, grabbing an iced tea at Starbucks, and I’ll be prospecting the person next to me” by striking up a chat.”

While selling life insurance is largely a commission-based job, companies do spend lots of money investing in new agents. Insurance companies spend thousands of dollars on income subsidies, medical benefits, and training. “We know investing in agents takes a while to pay off,” says Mark Pfaff, a New York Life executive.

Wondering if you might make a good life insurance salesperson? Here are some important qualifications to have according to the Bureau of Labor Statistics:

A State License: requirements vary by state, but typically you must pass several exams in order to qualify for selling insurance.
Education: while a college degree isn’t required, some companies may prefer applicants with education in business, finance or economics.
Continuing Education: Employers are finding continuing education more important as products offered change. Agents must stay up-to-date on tax laws and changes to government benefits programs in order to provide the best service to customers. Most states also require continuing education every two years in order for agents to keep their license.
High Energy: To sell life insurance, agents need to have a lot of energy and enthusiasm in order to find new clients and meet their needs.

Need A Job? Consider Selling Life Insurance is a post from: Peppercoin Insurance

What To Expect When Buying Life Insurance

alison — Thu, 04 Mar 2010 19:49:45 +0000

There are plenty of sources offering information on various life insurance policies, but do you know what actually happens when you buy it? This week my husband finalized a new life insurance policy and had to undergo some simple testing– which turned out to be a little more traumatic than he expected. He was told not to eat for six to seven hours before the testing and a nurse would come to his office to take a blood and urine sample. While attempting to draw blood, the nurse had a little trouble. After several attempts she wasn’t able to draw blood, but the entire process caused my husband to pass out– not once, but twice! Don’t worry, the nurse said this doesn’t happen very often, but in case you’re wondering what to expect when buying life insurance, here are some guidelines.

You will be asked to provide personal information such as:

height
weight
date of birth
habits such as smoking or drinking
financial information

Telling the truth is important because if you lie and the company discovers it, you may be forced to pay a higher premium, or worse yet, they could cancel your policy. Most companies also require an in-person medical exam. During the exam you can expect the following tests or procedures:

Blood Pressure
Heartbeat check
Record of height and weight
Blood sample
Urine sample

The medical professional will also probably ask you questions about your family medical history and your lifestyle habits. They’ll want to know about any activities you engage in that may affect your health like exercise, smoking, drinking, or even dangerous hobbies. All of this information helps the company to determine what type of a risk you are to the company and what they should charge you for life insurance coverage.

What To Expect When Buying Life Insurance is a post from: Peppercoin Insurance

A Guide To Key Person Life Insurance

admin — Wed, 17 Feb 2010 16:39:35 +0000

Anyone who runs a business needs to prepare for every eventuality. Unforeseen events in the business world can prove to be cataclysmic. One possible occurrence that must be considered is that of the death of individuals who are indispensable to your business. People die and business executives are no exception.

Without key figures your business could suffer a potentially devastating loss. Key person life insurance seeks to protect your business interests in the event that someone critical to the success of your business passes away. The person’s role will have to be filled and this may not be able to happen without a large financial cost.

The Price Of Expertise

Some job positions are easy to fill with qualified candidates while others are not. If a person is not going to be easy to replace and if their role was crucial to the business then key person life insurance can help. In the event of the key person’s passing this policy will pay out a predetermined amount to the company. This amount can then be used to hire a replacement.

This is especially important if the person who passed away was an owner. An owner will often contribute a great deal of time, effort, and expertise that others would not be able to contribute. Even if someone else can fill this role then you need to keep in mind that the owner had a great stake in the company’s future and may have gone above and beyond to make the business a success without drawing a full salary. Any replacement, not being an owner, would require a full salary. The money from key person life insurance would help a company afford this new higher salary.

Business Ownership Questions

If the person who passed away had a controlling interest in the business then what will happen to his or her shares when they die? This is a question that you want answered before it happens. If you do not want a business partner’s relatives to inherit the key person’s ownership then a buy sell agreement is necessary.

A buy sell agreement can stipulate that upon a person’s passing that their share of the business will be bought by the company itself. How does key person life insurance fit into this scenario? The money obtained from the key person life insurance can be used to pay for this person’s share to make sure that the company can afford the buyout.

The Specifics Of Key Person Life Insurance

Before anyone passes away, you want to know exactly how the financial implications will be handled. You will want to have a key person life insurance policy in place and you will want to know exactly how the money received from this policy will be used when this key person dies. When you plan all of the details out ahead of time there will be no need to ask how the money will be used or if there will be enough to cover the necessary expenses.

Key person life insurance protects businesses when they lose their key players. You never know when people will die but you can take steps to ensure that businesses live on. Key person life insurance can give you the money to carry on after someone who was an integral part of your business passes away.

A Guide To Key Person Life Insurance is a post from: Peppercoin Insurance

The Best Path To Health Insurance For The Newly Self-Employed

admin — Wed, 27 Jan 2010 16:58:45 +0000

Health insurance for the self-employed is always a dicey topic. How do you get good health insurance when you are self-employed? How do you get good health insurance and still be able to afford it?

While health insurance is a must, it can be hard to reconcile these two points. If you are already self-employed then it is likely that you have already faced these challenges, but what if you are newly self-employed?

Before You Become Self-Employed

Presumably you hold a job and have health insurance at your current job before you make the leap to self-employment. If you know that self-employment is in your future then you will want to plan ahead for this life change. The more time you have the more planning you can do so take full advantage of this time before you make the change.

You will want to take any opportunity you have to change to your employer’s cheapest health plan, as long as it will still work for you, before you depart from the company. While you will need an open enrolment period to accomplish this feat, if you have then chance then you should go for it. It will make life a little less expensive in the next step.

Hold On To Your Health Insurance

Even when you leave your job, you can hold on to your health insurance through COBRA. This act allows you to keep the insurance that you have now for as many as 18 months at groups rates provided the company you were at meets certain criteria and you were not fired for reasons such as incompetence or gross negligence.

This will help you to hold onto your coverage but the price of maintaining coverage while you are self-employed will be steep. Know this ahead of time. It has been estimated that individuals who get their insurance through an employer end up paying around 28% of their health insurance costs. Now you will be paying it all.

Marriage Benefits

If you have a working spouse then your insurance concerns may be nonexistent. You can just get on your spouse’s plan. This will be the next most cost effective option after getting insurance through your own employer.

Find New Coverage

If you do not have a spouse who can have you on their health insurance plan then you will need to make other arrangements. Your time with COBRA is not a time to rest easy. This is your chance to investigate the options that you have for personal health insurance. You want to scramble to compare plans, rates, and coverage because your COBRA period will be over sooner than you think.

You will have to find a policy that offers the coverage that you need at a price you can afford. You can always consider lowering insurance premiums by raising your deductible. You need to make sure that you will be able to pay this higher deductible but if you can then this is an easy way to get your hands on affordable health insurance payments.

This is the best path to health insurance for the newly self-employed. You want to plan ahead, use COBRA to ease your transition, and use the time that you are given to secure new health insurance coverage. Being your own boss means that you are the one taking care of the details and health insurance is one of the first that you need to take care of.

The Best Path To Health Insurance For The Newly Self-Employed is a post from: Peppercoin Insurance