Not the beneficiaries, according to critics. The common life insurance practice is coming under fire. "Retained-asset accounts" are the focus of investigations in New York and Georgia, and Florida estate planning attorneys are taking particular note of an inquiry by the U.S. House Oversight and Reform Committee.

A story published in the September issue of Bloomberg Markets magazine highlighted some of the risks involved with these accounts. A woman was named beneficiary of her mother's life insurance policy. When her mother died, the insurance company advised her to keep the payout -- over $100,000 -- in a guaranteed money market account. The company assured her the money was safe, and they sent her a "checkbook" so she could draw funds from the account.

Unfortunately, the woman's cousin forged checks on the account, making off with almost $50,000. The insurance company and the bank that handled the checks refused to cover the losses.

Unlike a bank account, a "retained-asset account" is not insured by the FDIC, nor is it subject to state and federal laws that require banks to verify signatures and cover losses.

About 130 life insurance companies hold almost $28 billion in survivor benefits. The money is in their own accounts, and experts estimate that the insurers earn millions of dollars each year off investment gains. The death benefits are enriching the insurance companies, according to critics, not the beneficiaries -- including families of military personnel killed in Iraq and Afghanistan. (It is those benefits that triggered the interest of the federal government.)

The companies insist the accounts are safe, and they point out that the accounts are particularly useful to survivors who need extra time to decide what to do with the benefits. But, the arrangement has proved more difficult for beneficiaries for several reasons: They may not have immediate access to the money; their inquiries may be handed off from the bank to the insurer and back again; and, if funds are lost, they are lost for good.

The woman whose cousin forged the checks learned her lesson the hard way. In federal court, the insurance company and the bank both denied liability. The court didn't buy their arguments, though, and the case was settled.

Judges in many states have been asked to clarify what responsibilities insurers have to holders of these accounts.

What is clear is that this woman's mother didn't think her efforts to plan for her daughter's future would go so awry.

Resources: Daily Business Review "Forged MetLife 'Checks' Show Retained-Assets Risks" 8/25/10