U.S. pays as Prudential invests troop death benefits

unhappycamper

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Mon Oct-04-10 04:42 AM
Original message

U.S. pays as Prudential invests troop death benefits

U.S. pays as Prudential invests troop death benefits
By David Evans
Bloomberg News
Sunday, October 3, 2010

When Prudential Financial invests the death benefits owed to survivors of U.S. troops killed in battle, the money comes from a source with deep pockets: the federal government.

~snip~

Prudential holds that taxpayer money, invests it and reaps the gains.

Here's how it works: If survivors request a lump-sum payment of the death benefit, Prudential opens a retained-asset account, a quasi-checking account that allows families to draw money when they are ready to spend it.

Until the money is used, it stays in Prudential's corporate account. There, the insurer invests it, mostly in bonds, making returns as much as eight times what it is paying out to holders of the retained-asset account.

What this means is that Prudential is investing - and profiting from - death benefits owed to service members' families, using money provided by the government.

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Scuba

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Mon Oct-04-10 04:48 AM
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1. The insurance industry at its finest.

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FreakinDJ

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Mon Oct-04-10 06:03 AM
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2. ALL insurance works that way for the last 75 years

what did you think they did with the money

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n2doc

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Mon Oct-04-10 06:31 AM
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3. k n r n/t

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wmbrew0206

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Mon Oct-04-10 07:34 AM
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4. What do you think banks and other insurance companies do when they have deposits from any death

benefits?

The banks and insurance companies are paying interest on those cash deposits and so they have to earn a return on them to be able to pay the interest.

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Wed May 01st 2024, 07:39 AM
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