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Retained Asset Accounts – Uses and Abuses

What is a Retained Asset Account?

Retained Asset Accounts are used by many life insurance companies to pay life insurance proceeds to beneficiaries. Instead of mailing the beneficiary a large single check for the proceeds, which typically would require many days to clear so the funds become available, a Retained Asset Account comes with “checks” the beneficiary can immediately write to pay bills. (The beneficiary also could write a single large check and deposit it in a bank and thus close out the account.) All the while the account is open the beneficiary continues to earn interest on the balance of the proceeds.

A major advantage of retained asset accounts for consumers is that it enables beneficiaries to have access to the funds they need right away, while taking time to decide what they should do with the rest, thus safely deferring making important investment decisions at a time when they are often in shock, grieving and vulnerable. Retained Assets Account typically pay a competitive rate of interest on the insurance policy proceeds, which often is higher than rates paid by local banks or money market funds.

The money in the retained asset account is held by the life insurance company, which is backstopped by a state Life Insurance Guarantee Fund, which protects life insurance policyholders and beneficiaries in a manner similar to the way the FDIC insures bank depositors.

In the rare event a stranger forges your signature on a retained asset account check, you as the owner of the retained asset account should have the funds restored by the life insurance company, in the same manner you would be made whole if someone forged a check drawn on a bank.

How You Can Learn More About the Benefits and Regulation of Retained Asset Accounts

To understand how Retained Assets Accounts were intended to operate, included below are some videos explaining Retained Assets Accounts from the person who invented them in 1983, Advocate Law Group’s Chairman, Gerry Goldsholle. Although Gerry now works as a lawyer exclusively representing insurance policyholders and beneficiaries, Gerry invented the Retained Asset Account concept in 1983 when he was an executive at the largest life insurance company in America. (Gerry also chaired insurance committees of the American Bar Association, the nation’s largest lawyer’s group, and the State Bar of California. Advocate Law Group’s other senior partner, Robert K. Scott, also has served as chair of the State Bar of California’s insurance committee.)

In the videos Gerry explains that Retained Asset Accounts programs were designed to create a win-win situation for beneficiaries and the insurance companies. Properly designed and operated, a Retained Assets Account can increase beneficiaries’ choice and get beneficiaries access to all or any part of their money much faster than a single check. A Retained Asset Account also should pay a higher rate of interest than banks and money market funds, He explains how insurance companies do make money on Retained Assets Accounts, just like banks make money on bank deposits. He also explains how some companies may have corrupted an outstanding innovation.

Is Your Insurance Company Denying or Delaying Payments from your Retained Asset Account?

Gerry Goldsholle’s decades as both an insurance company executive and insurance lawyer and his national stature as an insurance expert, is just one reason you’ll want the lawyers
at Advocate Law Group, and in the Advocate Law Group network, to assist you if a claim has been wrongly denied. Our firm and the lawyers in our Advocate Law Group Network have recovered hundreds of millions of dollars from insurance companies that improperly denied or delayed paying valid claims, or otherwise acted in bad faith.

When insurance companies act improperly or outrageously — whether by not operating Retained Assets Accounts fairly, or not paying valid claims — Advocate goes after them. Advocate Law Group’s partners and network attorneys know how to fight big insurance companies and insurance company lawyers. The Retained Asset Accounts concept was intended to help people, but if you or anyone you know has been harmed or disadvantaged as a result of a Retained Assets Account, call 1-888-ITS-LEGAL or click here to chat with one of our legal professionals for a free initial consultation today.

Watch the videos by Gerry Goldsholle on the pros and cons of Retained Assets Accounts.

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