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Trial Advocacy

Putting Retained Asset Accounts Into The Hands Of Beneficiaries

Instead of paying out life insurance proceeds upon death, the insurance industry has shifted to retained asset accounts (RAA). These “accounts” are misleading. The funds are not actually set aside for the beneficiary. Rather, the insurer keeps the money in its general fund and profits from the additional interest until the beneficiary makes withdrawals against the balance. RAA funds are not guaranteed and the beneficiaries receive only a token amount of the extra interest accrued.

The Bell Firm has been prosecuting cases on behalf of “beneficiaries” of retained asset accounts since 2007. We helped obtain the first favorable ruling from a federal appeals court regarding insurance companies’ use of such accounts, which the court described as “no more than an IOU.” Mogel v. Unum Life Ins. Co. of America, 547 F.3d 23 (1st Cir. 2008).

Did You Get A Checkbook Instead Of A Lump Sum?

Most life insurance policies, including employee benefits under ERISA (Employee Retirement Income Security Act), call for a lump sum disbursement to the beneficiaries upon death. Retained asset accounts violate the spirit of this time-honored protocol. In lieu of a lump sum payout, beneficiaries are issued a checkbook for withdrawing some or all of the funds when they need the money. But beneficiaries are not advised of the risks or how these accounts work. There is not even any guarantee that RAA checks will be honored.

The Bell Firm has cases pending against MetLife, Unum, CIGNA and Sun Life and is investigating cases against several other insurance companies for RAA practices. Contact us if an insurance company has sent you a “checkbook” instead of issuing you full payment for insurance proceeds owed to you. Trial lawyer John C. Bell has practiced law for 50 years, including extensive work in insurance litigation.

The Bell Firm, based in Augusta, Georgia, handles retained asset account cases throughout the United States. Call 706-408-8237 or contact us online.

Articles On The Subject Of RAAs

Life Insurance Firms Profit From Death Benefits – NPR
Death-Benefit Accounts Seem To Slight Survivors – New York Times
Veterans Group To Probe Insurer Handling Soldiers’ Benefits – Bloomberg

Reported Cases

Mogel v. Unum Life Insurance Co.