By Debbie Gregory.
Veterans of Foreign Wars (VFW) Commander John Biedrzychi, Jr. has claimed that the Department of Veterans Affairs was aware that Prudential Insurance encouraged its counselors to keep casualty pay-out monies in-house as a way to boost company profits.
Prudential is under contract to handle Sevicemember Group Life Insurance (SGLI) and Veterans Group Life Insurance (VGLI ) policies. Upon the death of the insured, the SGLI benefit is put into an interest-bearing Prudential Alliance Account in the beneficiary’s name. Beneficiaries may choose a lump-sum payment or 36 equal monthly installments, a feature designed to allow survivors time to grieve and plan their future.
The court-ordered release of internal company documents revealed Prudential’s practices also included training their agents to dissuade surviving family members from taking the traditional lump-sum payment.
VA spokesman James Hutton claimed the VA was unaware of the counselor training scheme, or that Prudential was profiting on the backs of deceased veterans families.
“VA does not know how Prudential trained its employees to communicate with beneficiaries about the advantages of retained asset accounts prior to 2010 or whether the company believed that such accounts would improve its earnings,” Hutton said in a statement.
Hutton said that the VA mandated administrative changes to “ensure that VA beneficiaries receive clear and complete information regarding their life insurance benefits.”
He added that the VA ordered claim forms be modified so that beneficiaries would be able to choose from four clearly defined payment options. The department also required Prudential to contact all beneficiaries whose accounts were still open after six months to make sure they understood the payout options.
So, what do you think? Are you convinced that the VA was in the dark about what Prudential was doing?