Monday, October 4, 2010

Mass. family at center of suit: Class action alleges Prudential unfairly profited from death benefits

By Nan Levinson, Globe Correspondent  |  October 4, 2010

Kevin Lucey was at the wake for his son, Jeffrey, a Marine who had committed suicide at their Belchertown home in the summer of 2004, when military officers presented him with a stack of forms to sign.

“I never read them. I just signed,’’ he said. “I wanted to get back to Jeff.’’

Three weeks later, Lucey received a kit from Prudential Insurance, which provides life insurance benefits to veterans on behalf of the federal government. He had the option of receiving the $250,000 payment in a lump sum or 36 monthly installments. Like most people, Lucey opted for the lump sum, and Prudential explained it had set up an “Alliance Account’’ in his name.

Still reeling from Jeffrey’s death, he asked his wife, Joyce, what she wanted to do about the money.

“I didn’t want to hear it,’’ she recalled. “I said it was blood money.’’

They stashed the kit in a drawer.

Several months later, on the advice of a colleague, Kevin Lucey decided to withdraw the money and invest it more profit ably elsewhere. The paperwork had included what looked like a bank checkbook, so he wrote a draft for the balance. Prudential took nearly a month to send the money, he said.

Only much later did he learn that Prudential had never deposited any money in his account, instead investing it as part of its general account and passing on only a small portion of the interest earned, he said.