Take the Money and Run!

Bloomberg.com relates the sad tale of Cindy Lohman of Great Mills, MD, who lost her son, a 24-year-old Army sergeant, in Afghanistan. She received a 9x12 in. envelope with a "checkbook" from Prudential Financial Inc., but when she tried to buy a bed and later a camera with the checks, they were rejected for the simple reason that Prudential had not deposited a single cent into a checking account, but was using the entire $400,000 in their general corporate account. So in addition to check fraud, insurance companies such as Prudential and MetLife could well be in violation of a 1933 law that forbids companies from accepting deposits without state or federal authorization. Thus a beneficiary is better off putting his or her money into an FDIC-insured savings account or interest-bearing checking account rather than leaving it in a "retained-asset account."