USA — Council Works to End Life Insurance Compensation Confusion

WASHINGTON — A spe­cial advi­so­ry coun­cil has agreed to pro­vide fam­i­ly mem­bers and sur­vivors of fall­en ser­vice­mem­bers and deceased vet­er­ans more options for how they receive life insur­ance com­pen­sa­tion.
The agree­ment paved the way to end con­fu­sion for sur­vivors and fam­i­ly mem­bers of fall­en troops, John Gin­grich, chief of staff for the Vet­er­ans Affairs Depart­ment, told reporters yes­ter­day. Bet­ter com­mu­ni­ca­tion of life insur­ance claims options and casu­al­ty assis­tance train­ing also will result from the change, he added.

“The goal of these meet­ings is to make an out­stand­ing pro­gram even bet­ter,” Gin­grich said. “I believe the dia­logue between the par­tic­i­pants aid­ed us in under­stand­ing their issues and con­cerns, and we received good insight.”

The VA cur­rent­ly uses claims forms with two pay­ment options: one lump sum, or equal pay­ments for 36 months. Choos­ing the lump sum or leav­ing the options unchecked on the form would auto­mat­i­cal­ly default the beneficiary’s ben­e­fits in an alliance account han­dled by Pru­den­tial Finan­cial Inc. Pru­den­tial then sends the ben­e­fi­cia­ry a check­book for an inter­est-bear­ing account held by the insur­ance com­pa­ny.

The Pru­den­tial account is not guar­an­teed by the Fed­er­al Deposit Insur­ance Cor­po­ra­tion, accord­ing to VA, leav­ing some sur­vivors and fam­i­lies of fall­en ser­vice­mem­bers dis­sat­is­fied with the option.

A new option on the form is expect­ed to become avail­able on VA’s web­site in mid-Decem­ber, Gin­grich said. It will allow ben­e­fi­cia­ries to choose to receive one lump sum by check, which they can deposit as they wish, he added.

Addi­tion­al lan­guage on the new forms, he not­ed, will explain to ben­e­fi­cia­ries who choose the lump sum alliance account that they can write a check at any time for any amount, includ­ing the entire bal­ance. The new forms also cite that alliance accounts are not FDIC guar­an­teed.

The three options on the new forms, accord­ing to VA, will read:

— Lump Sum – Alliance Account

— Lump Sum – Check

— 36 Equal Month­ly Pay­ments

Gin­grich added that, even­tu­al­ly, ben­e­fi­cia­ries also will have the option to receive a lump sum by elec­tron­ic trans­fer.

“There’s no con­fu­sion on the [new] form now,” Gin­grich said. “The new form makes it very clear. We want to make sure we are clear, and peo­ple under­stand how they are receiv­ing their ben­e­fits.”

Gin­grich also not­ed that VA is work­ing with the Defense Depart­ment to pro­duce train­ing videos that will help casu­al­ty assis­tance offi­cers bet­ter inform sur­vivors and fam­i­ly mem­bers of the new life insur­ance claim options.

Inde­pen­dent and free finan­cial coun­sel­ing will be avail­able for sur­vivors, as well as new pack­ets that bet­ter explain their ben­e­fits, he added.

Jeri Busch, direc­tor of the Defense Department’s mil­i­tary com­pen­sa­tion pro­gram and DoD rep­re­sen­ta­tive on the coun­cil, added that she was pleased with yesterday’s deci­sions and VA’s efforts.

“We’re very pleased to find that the VA has under­tak­en to do some improve­ments to the pro­gram,” Busch said. The train­ing video and addi­tion­al infor­ma­tion, she said, will pro­vide “greater trans­paren­cy and more choic­es and more options for our fam­i­lies to make sure that our ben­e­fi­cia­ries are treat­ed with respect, are pro­tect­ed, and are quot­ed the upmost care.”

Source:
U.S. Depart­ment of Defense
Office of the Assis­tant Sec­re­tary of Defense (Pub­lic Affairs)

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