Veterans Affairs Secretary Eric Shinseki was urged on Thursday by a bipartisan group of senators, including Bernie Sanders, to stop insurance companies from profiting off benefits owed to the service members survivors. A recent report by Bloomberg Markets Magazine found life insurers are secretly profiting from death benefits owed to the survivors of service members. The insurance companies are pocketing interest on funds for the families of fallen service members under the Service Members Group Life Insurance program. "It is outrageous that insurance companies appear to be taking advantage of grieving families simply in order to make a profit, and it is an affront to the memory of their loved ones," the senators wrote to Secretary Shinseki. He announced that the VA will investigate.

According to the Bloomberg report, it appears that insurance companies are earning profits on the interest on funds paid to the families. Rather than paying interest on the $400,000 life insurance fund to survivors, the funds instead are placed in a general "retained asset account." The Bloomberg investigation found that insurance companies earned roughly 5 percent on returns from these accounts in 2008 and 2009. Families of service members, however, were paid substantially less.

The practice of issuing what the insurers call "checkbooks" to survivors, instead of paying them lump sums, extends well beyond the military, according to Bloomberg.

Also troubling, according to the senators' letter, is that the assets are not insured by the Federal Deposit Insurance Corporation. "In light of lessons learned from the recent financial crisis, this is deeply troubling and could cost the families of service members hundreds of thousands of dollars in lost funds should an insurer fail," the letter added.

To read the Bloomberg report, click here.