40 million ways to misuse insurance

Former New Jersey Gov. Jon Corzine has a knack for using money -- often not his own -- to gain political and personal advantage. But his latest power play -- taking $40 million of his former company's insurance to protect himself -- is mind-boggling. Corzine is now in the CNBC headlines because the big bets he took as chief executive of MF Global brought down the firm in one of the 10 largest bankruptcies in U.S. history. But his risk-taking, free-spending ways began a long time ago. On the move Corzine rose to prominence as co-chair of Goldman Sachs, a leading investment bank and, some would say, the biggest predator on Wall Street. But in 1999 he was bounced out after doing battle with his co-CEO. Corzine left with $400 million and decided to own New Jersey. He handily won one of its U.S. Senate seats in 2001 by spending $62 million of his own money in the most expensive Senate campaign in history. When Gov. Jim McGreevey resigned after wrongdoing, New Jersey State Sen. Richard Codey was appointed to succeed him until the interim election in 2005. But Corzine decided that he wanted to be governor and pushed Codey… (continue reading......)

When the end is near, there's no place like home

For many people the thought of dying in a nursing home is worse than death itself. Those I've spoken to -- particularly the ones reaching their 80s or 90s, when they have to consider the inevitable  -- want to die in their own home, in familiar surroundings. My mother wanted nothing more than to remain in her home in her later years. And she did. I can't blame them. I recently watched someone  -- a World War II veteran  -- die in a nursing home. Although he received decent care, and the nurses were kind to both him and his visitors, noisy and constant interruptions, people screaming for the nurse when they didn't even know what they wanted, televisions blaring and the smell of disinfectant permeated the air. "No matter how they disguise it, it's an institution," says Richard Gelula, executive director of TheConsumerVoice.org, which advocates for the elderly. "They operate for themselves -- and you're on their schedule." Overstaying your welcome The insurance industry -- until recently -- embraced the concept of long-term care insurance (LTCi), which was sold as a way to pay for nursing home care. This product sold well in past years, due in part to… (continue reading......)

Should home insurance companies make life harder for gun owners?

Florida is one of the southern tier of states in which the right to bear arms is considered fundamental. But recently, Citizens Property Insurance, the state-run insurer of last resort, sent out a questionnaire asking homeowners about their gun ownership. And another home insurer, Castle Key Insurance, allegedly canceled a policy because the policyholder had ammunition in the home. These actions raise questions that have been at the forefront of the gun debate: Does gun ownership make a home more dangerous? And should homeowners with weapons and ammunition pay more in insurance premiums based on the number and type of guns they own? Straight shooter There are an estimated 300 million guns in the hands of about 50 million households nationwide. Among the biggest sellers recently are rifles modeled on the military's M-16, along with semiautomatic pistols, both of which can have large capacity magazines. But the issue isn't just safety. Gun-rights groups such as the National Rifle Association (NRA) view this kind of "questionnaire" as both a way to penalize gun owners with higher premiums and as a backdoor way to find out who owns guns. So it's not surprising that these Florida insurers got an immediate rap on… (continue reading......)

A method to the ‘Madness’: Hole-in-one insurance

While we were picking our brackets in the annual college basketball tournament known as "March Madness," insurers were busy with their own game of chance. It's called "hole-in-one insurance." Hole-in-one insurance is often behind the scenes on basketball courts, football fields and baseball diamonds -- in fact, virtually every sporting event ranging from golf to hockey. Here's an example. It's halftime during a basketball game. To keep fans and viewers entertained while the opposing teams are in the locker room, kids from the audience are escorted to the half-court line. Each has one chance to sink a basket and earn college tuition. What happens if one of these lucky kids does make the free throw? Management isn't going to pay and neither is the university. Instead, the cost of this unlikely win will be paid for by the "hole-in-one" insurance company. Insurance madness Most major insurers, such as AIG, Lloyd's and even Warren Buffett's Berkshire Hathaway, are involved in this sports-betting business. But, unlike us, they bet these kids wouldn't make the basket, because if they do then the insurance policies have to pay. Or, in the case of Warren Buffett himself, out of his own pocket in his recent… (continue reading......)

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