How was a toddler carrying half a million dollars in life insurance?

February 8, 2013

AMONG THE haunting questions that need to be answered about the death of Prince McLeod Rams is one recently posed in a letter to this page. “What about the insurance companies,” Linda Cole wanted to know of the three firms that wrote policies totaling more than $500,000 on the life of the 15-month-old allegedly drowned by his father. Law enforcement authorities characterized the death as a premeditated scheme to collect money. “Why . . . issue a policy so large that it may have created a potential motive for his slaying?” asked Ms. Cole.

The large amount of insurance — one policy was reportedly for $443,000 — as well as the existence of multiple policies on so young a child should have triggered alarm bells, according to insurance experts we consulted. The fact that none rang is cause for further investigation — if not by police, then surely by the authorities who regulate insurance in Virginia, where the father lives.

“An unheard amount for a minor” is how Tony Steuer of United Policyholders, a California-based nonprofit advocate for insurance consumers, characterized the $443,000 policy allegedly taken out on Prince by his father, Joaquin S. Rams. Mr. Rams, who has been charged with first-degree murder in the Oct. 21 death, proclaimed his innocence on a Web site prior to his arrest.

Any underwriting process should be careful in examining the need for insurance and whether an insurable interest exists. Policies on children — which consumer advocates generally advise against — usually are designed to cover burial expenses, produce future savings or protect insurability for the child. Only in cases of a child having income (a movie star, or maybe a young heir) would such substantial insurance be warranted.

“We have nothing to offer up for your piece,” said a spokesman for MassMutual, the insurer named in a police affidavit and, according to Prince’s mother, Hera McLeod, the holder of the largest policy. The police affidavit notes that the MassMutual policy (erroneously) listed Ms. McLeod as having died. Neil Jesani of BeamaLife in New Jersey, identified by Ms. McLeod as having written the policy, sent us an e-mail referring us back to the MassMutual spokesman.

Ms. McLeod told us that police showed her the three insurance policies, adding that the smaller ones — $50,000 and $35,000 — were held by Gerber Life Insurance Co. and Globe Life and Accident Insurance Co. A Gerber spokeswoman issued a statement expressing sadness about the case and saying the company was compliant with all laws and regulations, takes the matter seriously and is cooperating with authorities. There was no comment from Globe.

According to Ms. McLeod, all of the policies were contracted in the fall of 2011, about the time she and Mr. Rams were in a court dispute that resulted in Ms. McLeod winning sole legal and primary physical custody of Prince.

Just as Prince’s death should prompt soul-searching by the authorities in Montgomery and Prince William counties who allowed Mr. Rams to have unsupervised access to Prince despite Ms. McLeod’s warnings, so should it cause a reexamination of the insurance industry’s practices and behavior.

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