End `schemes' holding vets' benefits

The News Leader

August 1, 2010 7:39:13 AM PDT
U.S. Sen. Charles Schumer is seeking to end a practice in which insurance companies hold the death benefits of soldiers killed in action to collect interest while doling out small amounts to survivors.

In the widespread, legal practice first reported by Bloomberg Markets magazine, insurance companies provide a small amount of interest to grieving families and provide a checkbook to withdraw funds. Meanwhile, the companies that hold the benefits collect greater interest.

The New York Democrat says he is crafting a measure that would require the Department of Veterans Affairs and the federal personnel office for all federal workers to contract with companies that offer a lump sum payment for a death benefit as the default.

There was no immediate comment from Veterans Affairs.


Load Comments