Specifically, there are some things bubbling below the surface that are really benefits of this program, as well as some lessons for people to learn.  First, the lesson:  read the fine print.  I am not about blaming the victim, but these folks can have the full death benefit at any time.  The fact that there are significant emotional issues involved is not the fault of the insurance company.  The real problem in my view is that the beneficiaries are either uninformed or misinformed by the agencies administering the federal programs and the fact that the agencies may not understand their own benefit programs to begin with.
 
Second, the fact that this capital has been preserved for the beneficiaries rather than squandered is completely missed. Although I am not aware of any studies that focus on the economic well-being of beneficiaries of life insurance contracts, it is well documented that most lottery winners end up back at their initial economic reality (or worse) in an alarmingly short period of time. I'm not sure that the experience would be much different with this group of people.  Particularly if I am correct in point number three.
 
Third, if these policies were sold by an agent, much of this, if not all, would go away.  Again, I do not have the research on this, but the SGLI policies mentioned in the article do not use an agent, and I am curious as to the percentage of the total policies in question that are sold without an agent?  This is the silver lining I'm talking about - the next time someone asks why I should pay a little more or work with an agent rather than buy off the internet there is a very real, dollars and cents answer - your beneficiaries will have proper guidance on how to access and manage the proceeds. As a result, they may just avoid writing a bad "check" as one of the beneficiaries in the story did.
 
Bottom line, as much as the practice of retaining death benefits is at the very least questionable, a little bit of personal responsibility, and good advice from a professional life agent or financial planner, solves it.  A government investigation or more regulation is not the answer.
 
One last thing:  It's an election year and Cuomo, the New York Attorney General heading up the investigation of this issue is running for Governor of New York. 

I'll speak to you next week,