Council Works to End Life Insurance Compensation Confusion
By Army Sgt. 1st Class Michael J. CardenAmerican Forces Press Service
WASHINGTON, Nov. 19, 2010 - 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."
Veterans Affairs Department website for Life Insurance
Defense Department's Military Compensation website
