Lohman, a public health nurse who helps special-needs children, says she had always believed that her sonís life insurance funds were in a bank insured by the FDIC. That money ó like $28 billion in 1 million death-benefit accounts managed by insurers ó wasnít actually sitting in a bank.
It was being held in Prudentialís general corporate account, earning investment income for the insurer. Prudential paid survivors like Lohman 1 percent interest in 2008 on their Alliance Accounts, while it earned a 4.8 percent return on its corporate funds, according to regulatory filings.