Prudential benefiting from combat deaths of U.S. troops

[ensho]

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/02/AR2010100203324.html


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.

After a service member dies in combat - including the more than 4,000 who have been killed in Iraq and Afghanistan - the Department of Veterans Affairs sends Prudential the full amount of each family's life insurance coverage, usually $400,000.

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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.
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Prof. Powers says "They have what appears to be a nice sweetheart deal with the federal government,"

and you know the CEOs must be war loving neo cons