Is your company
- legal or
Surprisingly, in spite of scandals and lawsuits people still seem to have trouble understanding that they are different—not joined at the hip.
I could write a lot on this subject to go along with all the articles and advice already out there, but I’m a believer that stories, especially true stories, carry more power.
Such is the story of MetLife that, along with Prudential and John Hancock, will pay out more than a billion dollars for their completely legal but totally dishonorable actions.
The difference between an annuity and life insurance is that the former is paid to a live beneficiary, while the latter is paid to the dead beneficiary’s heirs.
A live beneficiary makes a fuss if the check doesn’t arrive on time.
Heirs only make a fuss if they know abut the insurance policy.
MetLife and the others were very careful to check to see if annuity beneficiaries were among the living, since they could stop paying if they weren’t.
But they saw no reason to cross reference deaths with their life insurance holders, because then they would have to pay.
An absolutely legal decision—but…
“There is simply no reason why insurance companies shouldn’t be scrubbing their policy lists,” looking for matches with the Social Security Administration’s master death index. (…)They stressed that insurers had generally checked the Social Security death index regularly to see whether other customers, who bought annuities, had died. In that case, the insurers stopped sending payments.
Stories are powerful teaching mechanisms.
The difference between legal and honorable should be crystal clear.
Flickr image credit: John Murphy