Fleecing American Soldiers

The New York Times
July 21, 2004

When unscrupulous people go after the wallets of underpaid soldiers, it's always offensive, but in a time of war, it stirs special outrage. This week's investigative report by The Times's Diana B. Henriques shows that at least since the Vietnam War, and with increasing intensity since the Iraq war began, insurance salesmen have been fleecing American soldiers, with the tacit -- if not explicit -- approval of some lawmakers and Pentagon officials.

The abuses center on the sale of complex high-commission, insurance-based investments to recruits. Many of the sales occur on the bases and in the barracks -- a direct violation of Defense Department rules. The process is often greased -- and tainted -- by the presence of retired military officers who have become sales agents or are otherwise associated with the insurers and by the Pentagon's blind eye toward reports that have detailed the abusive practices. Even worse, a sleazy alliance of insurance lobbyists and election-minded lawmakers has consistently blocked Congressional and Pentagon efforts to clamp down on the sales. The cast of characters is so varied that it's difficult to say where a crackdown should focus. A moratorium on these sales pending a Congressional investigation would be a good start.

In 2000, a Pentagon report recommended substantially increased regulation of insurers, or the outright prohibition of life insurance sales on bases. The industry cried foul, and Congress and the Pentagon responded timidly. Ditto last summer. This time, Washington must be moved by the facts, not the lobbyists. These investments are usually wholly inappropriate. Many of the soldiers do not need any more insurance than they receive through the military for a nominal cost. Those who do would probably be better off with something other than the typical tad of coverage offered by these hucksters for $100 or more a month. The men and women in uniform put their lives on the line. They shouldn't be coerced into turning over a chunk of their pay, too.

Copyright © 2004 The New York Times Company

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