The lawsuit is seeking class action status and was brought on by the parents of a man in the US military who died in 2004. The parents are the beneficiaries of their son’s $250.000 life insurance policy. The US Department of Veteran Affairs stated they were investigating the practices of insurance companies that put the death benefits of veterans into corporate accounts. The insurance company keeps most of the investment profits and only pays out a small portion to the surviving beneficiaries.

Reports from the Department of Veterans Affairs show the Prudential Insurance collected $982.8 million as the administrator of veterans’ policies in 2009, $144.1 million in income from investments, and held more than $2.5 billion in reserves. Lawyers representing the plaintiffs in the case state that the money accrued from interest is not money that belongs to Prudential.

Prudential has reportedly been talking with the Department of Veterans Affairs about the allegations. The Chairman and CEO of the company, John Strangfeld, stated ‘It is important that the beneficiaries of our fallen service men and women are treated with dignity and respect during a very difficult time. Given the questions raised over the life insurance program we administer for the Department of Veterans Affairs, we welcome an opportunity to address the concerns and to set the record straight.”

New York’s Attorney General Andrew Cuomo has also launched an investigation into fraudulent practices of other companies involved in the life insurance industry involving the denial of life insurance benefits to grieving family of military members. In Cuomo’s investigation, not only did insurance companies profit from the interest accrued, it was found that initial monies were not deposited with banks insured by the FDIC.

Prudential Insurance Investigated for Fraud Against Veterans was created by and is property of American Consumer News.

Obtaining life insurance is not a pleasant experience, but it is necessary. Keep in mind that it is not for you, but for those you love. Looking at it in that light helps you stay motivated to get it done.

Here are six steps in shopping for life insurance that will hopefully make it less of a chore.

Buy what you need. It is easy to buy too much or too little insurance. You need buy only what you need. The task of finding out how much you need is determined by a thorough review of your circumstances. That is why a good, local insurance agent is much better than those who do not have offices in your area.

Term over whole. The debate between term life insurance and whole life or cash value insurance is settled: term life insurance is the way to go. Paying more via a whole life policy in order to build up cash value is not a wise use of your investment money. You can find much better returns on your money by placing it into conservative municipal bonds and other stocks.

Check Internet quotes. Even though you are better off buying insurance locally, it never hurts to get price quotes from Internet insurance providers. This way, you can compare prices and challenge your local agent for a better deal. After all, it is your money and you deserve the lowest premium you can get.

Get healthy. Before you apply for life insurance, take time to get healthy. If you are not, you will pay a higher amount for your life insurance. Now more than ever your health plays a huge role in the amount of your monthly premiums.

Stay with major providers. There is nothing like staying with the major life insurance providers for stability. Do not compromise your coverage by obtaining insurance from a carrier that may or may not be around long term.

Evaluate life changes. Once you have your life insurance in place, make sure that you perform a checkup every 18 to 24 months in order to make changes to your policies that affect your insurance. Life insurance is not a ‘set and forget’ proposition.

Using these steps, you can find a policy that is right for you and provides for those you love when you are gone. Keep in mind that now is a good time to look for life insurance because rates are very good at this point.

6 Steps in Shopping for Life Insurance was created by and is property of American Consumer News.

An interesting topic that I have been reading about is the issue of life insurance for children. I, like many parents, was under the impression that purchasing life insurance was a responsible parenting decision. No one ever wants to think of the unthinkable, such as how to pay for the funeral of a child but the decision to purchase life insurance seemed like the right thing to do, or so I thought.

There have been a lot of different views discussed around the internet about buying your kids life insurance and I was stunned to learn that many leading financial experts consider the purchase a waste of money. Essentially, these experts agree that since the purpose of having life insurance is to protect a person in the event of a loss of income, it is pointless for a child to have a policy since a child does not have a job. Many feel that the only reasons a life insurance policy should be purchased for a child is if there is a family history of health issues that could result in difficulties getting insurance later in life. In such a case, insurance experts recommend finding a policy that is renewable and gives the option of converting to a whole life insurance policy.

So what to do? Those who say that insurance policies for children are a waste of money suggest that money be instead deposited into a savings plan, such as a 529 plan or an Education IRA. There is a small percent chance that a child will grow to be uninsurable as an adult and the money saved in an interest-baring account will generate more cash value than the value of the insurance policy.  It is also important that parents understand how essential it is to have adequate insurance on themselves before a policy for a child is even considered. 

Sadly, there are many unscrupulous agents and insurance companies use scare tactics to get parents to purchase policies, such as questioning their love for their children or their responsibilities as a good parent. Ultimately, the decision that is right is the decision that works best for your family and your finances. There are many choices and options regarding financial stability for your children and what works for one family, may not work for others. I feel confident in keeping the policy for my child to ensure that she will grow up to have insurance that she can increase as needed.

Is Life Insurance for Kids a Waste of Your Money? was created by and is property of American Consumer News.