1973 0220 - GOV (Senate) - The Life Insurance Industry - Part 1 of 4

  • (p1) - ...American consumers pay a bill without having more than a somewhat vague idea of what they are buying.
    • If this were the result of flimflam, enforcement agencies would have been all over the sellers years ago.
      • But this is not intentional flimflam it is as the man in "Fiddler on the Roof” explained away so many things— "tradition."
  • These 140 million consumers, at an outlay of about $23 billion a year, are buying life insurance policies. 

--  Senator Philip Hart (D-MI)

  • (p1) - Senator Philip Hart (D-MI) - Many years ago, when life insurance was born, a consumer knew what his annual premium bought; a guarantee that on his death his heirs would receive x amount of money. This money generally was to compensate heirs for the loss of incomedue to the breadwinner's death.
    • As the years went on, insurance companies devised the level-premium method, which added a savings element to the insurance or death protection.
      • The companies thought the idea would have consumer appeal, and would protect against the companies ending up with only the worst risks.
      • And the facts seem to suggest the companies were right.
    • Of the total 20 million new ordinary and industrial life policies bought in 1971, less than 1 in 10 was the old-fashioned term protection.
    • But while the policies became a package of savings and protection, the premiums stayed a single unit.
    • Thus, the vast majority of consumers today are putting a part into savings, and a part toward death protection when they deposit that premium.
    • But no one is telling them how much goes into each category.
    • Obviously, as the convening of these hearings shows, I have the feeling that it is time that perhaps someone did.
    • And this is a philosophy shared apparently by a number of others that we will hear during this opening set of hearings. 
  • (p17) - David L Brain, executive vice president of Kentucky Central Life recently surveyed the top executives of 62 large, medium, and small life insurance companies for their opinions on the impact of the consumer movement on their business.
    • Thirty percent felt that the activity of the critics will lead to reduced premium rates or more liberal benefits. “
    • In addition to the negative publicity the industry has already received, wrote Mr. Brain, “the most frequently mentioned effects of consumerism are:
      • ...better service and improved policy owner relations;
      • ...stiffer government regulations;
      • ....and a trend toward more frequent price benefit comparisons..."
  • Armstrong Report
  • TNEC
  • (p113-175) - Understanding your Life Insurance, Institute of Life Insurance

  • The Widows study - LUTC and LIAMA

    • (p313-391) - The Onset Of Widowhood, vol. 1 

    • (p392-508) - Adjustment to Widowhood, vol. 2

  • (p566-610) - Statement of Joseph Belth
    • p599 - Table 3 - Annual Information
  • (p720-748) - Joint Special Committee on Life Insurance Costs  ---  [BonkNote]  ---  29p 
    • Cost Comparison Methods Table
  • (p749-759) - Speech of E.J. Moorehead, 1970/11/09