Insurance businesses profiting off young lives

The insurance specialist who sold Joaquin Rams a $444,083 life insurance policy on his then-infant son recently recalled for us some of the circumstances of the transaction: How he contacted Rams by phone after Rams responded to an ad.

Data on how many murders are motivated by life insurance is spotty; advocates say cases the exception, not the norm.

About their initial conversation, in which Rams boasted about being a high-level government employee and also an aspiring musician who had been on the “Voice” and was about to go on tour with Jay Z. How he did a Google search but found “absolutely nothing.” And how he sold the policy anyway because it was really none of his business to raise suspicions. “I was a salesman,” John Donovan explained, “selling a product for a commission.”

That a 15-month-old child ended up paying with his life — killed by his father who wanted to cash in on this and two other policies — should give pause to an industry that sees juvenile life insurance as a means to easy profit. Obtaining life insurance on a child, according to insurance experts, takes less effort than getting a policy on an adult, with fewer checks that might reveal possible fraud or bad intent.

MassMutual, the financial group that issued the $444,083 policy, has declined to discuss the particulars of this case with us. After Rams was convicted in April of capital murder and insurance fraud for the 2012 death of Prince McLeod Rams, a spokesman emailed a statement: “First and foremost, this is a horrific tragedy and we are pleased that justice has been served. MassMutual continues to adhere to rigorous standards and practices for both the review and approval on all policies we underwrite and issue.”

Donovan, an independent broker under contract with MassMutual in 2011, said the policy was the largest he had ever written on a child in his career, so one might expect a fair degree of scrutiny from the underwriters at MassMutual. Not only did they fail to discover that Rams lied about his financial situation and about Prince’s mother being dead (she wasn’t), but also they did not detect that he had already applied for a $30,000 policy with another company. Several months later, a third company issued a policy for $50,000. So much for the industry’s vaunted review by third-party administrators.

Prince’s mother, Hera McLeod, said she had been worried about her ex-boyfriend taking out insurance on the child — their custody fight and her bid to prevent unsupervised visits were marked by allegations that Rams had previously killed the mother of his older son and his mother for insurance purposes — but was stymied in getting information. She and Prince’s grandmother contacted several insurance companies and were told that the only way they could obtain information was if Prince were dead and a policy was paid out to a beneficiary.

There should be, McLeod argues, a national registry that would allow people to find out if insurance policies have been taken out on them or their loved ones. This would be a helpful tool for law enforcement and insurance agents. And other safeguards should be put in place, too. Instead of allowing companies to set their own rules, states need to establish standards (as Washington state has done) or set limits on the amount of insurance that can be taken out on a child’s life (as is the case in New York).

Data on how many murders are motivated by life insurance is spotty, and advocates for the industry may be right that cases like Prince’s are the terrible exception and not the norm. But do your own Google search and you’ll come across heartbreaking cases such as 7-week-old Tara Abdelhaq suffocated by her mother in 1995 to collect $200,000 or the three children of Deborah and Timothy Nicholls left in a burning house in 2003 for $10,000 on each child. What won’t show up are instances in which a killer might have gotten away with the crime — and that is even more reason for better safeguards.