United States. Temporary National Economic Committ.
Investigation of concentration of economic power; monograph no. 1[-43] (Volume no. 2) online
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Industrial whole life
Industrial 20-year endow ment.
Industrial whole life
Industrial 15-year endowment.
Industrial 20-year endowment.
Industrial whole life.
Industrial 15-year endowment.
19 policies (5 ordinary and 14 in-
dustrial).
Years
in
force
Amount
of insur-
ance
$1,000
124
1,000
1,000
500
266
266
267
267
981
1,000
105
369
250
287
118
100
102
65
8,067
Annual
premiums
paid by
family
$29. 16
10.40
22.21
12.71
17.68
8.84
8.84
8.32
8.32
11.03
14.68
4.30
4.60
10.75
4.60
11.50
5.20
2.35
9.40
204.89
CONCENTRATION OF ECONOMIC POWER 67
Total family income, $1,248.
Average annual income per family member, $113.
Premiums as percent of income, 16.4 percent.
Two insurance companies issued these policies; one issued three ordinary and
six industrial; the other, two ordinary and eight industrial.
Percent of premiums paid on chief breadwinner, 15 percent; on other bread-
winner, 8 percent.
Just what the plan of insurance in this family might be is difficult
to determine. It has no apparent relationship to age, sex, or depend-
ency status. No more light is shed by an examination of the policies
issued by the two insurance companies. One company had issued
three whole-life ordinary policies, four 20-payment life industrial poli-
cies, and two 20-year endowment industrial policies. The other com-
pany had issued two ordinary whole-life policies, one 20-payment life
industrial policy, two 20-year endowment industrial policies, two 15-
year endowment industrial policies, and three whole-life industrial
policies. The periods during which these policies were taken out were
the same for both companies.
The Asta family had paid all premiums to date at the time of enu-
meration. In 1936, however, they had borrowed $19.22 on one ordi-
nary whole-life policy 2 weeks before taking out another whole-life
ordinary policy for $1,000. This loan had not been repaid. And yet
the family subsequent to the loan took out — in addition to the whole-
life ordinary policy just mentioned — six more industrial policies, two
of which were with the company which had made the loan.
The Blank Family
Relief Family — Paying 6.5 Percent of its Income for
Insurance— In Spite of Lapsation History New Policies
Issued at Time of Dividend Payments with Resulting
Lapse as Soon as Dividend Credits Exhausted.
The Blank family lived in a dilapidated house in the industrial
section of Cambridge. The family consisted of the father, mother,
mother-in-law, and 10 children ranging from 8 months to 21 years of
age. The father had been on the Work Projects Administration for
several years. Before getting on the Work Projects Administration
he had been on the welfare rolls for a period of 2 years. Prior to that
he had worked for 10 years as a laborer in a paper-stock plant where
his wages had never exceeded $18 a week. During the past 12 months
Mr. Blank had received $13.75 weekly from the Work Projects
Administration — a total of $715 for the year. However, a few days
before the supervisor called on the Blanks, Mr. Blank had been laid
off the Work Projects Administration as a result of the 30-day fur*
loughs compulsory for those who had been on tne Work Projects
Administration for 18 months or more. i'oq
During the last 12 months, contributions toward the rent plus income
in the form of food and clothes issued on a surplus commcdity card
were estimated at $280. None of the children except one of the girls
had been successful in obtaining work. Mary, aged 16, had worked
for 2 weeks in a shoe factory and had earned a total of $22. (The
whereabouts of the eldest, Richard, aged 21, was unknown.) Thus
the total annual family income for the period under consideration
68
CONCENTRATION OF ECONOMIC POWER
amounted to $1,017, and the average annual income per family mem-
ber living at home was about $85.
The present insurance in force in the Blank family is shown on the
following schedule. There were eight policies on which premiums
totalling $66.55 annually were being paid. In addition Mrs. Blank's
mother, aged 77, held a policy for $114 which was "paid up" and
Mr. Blank had a policy for $12 which had arisen as the result of the
nonforfeiture provision of a policy on which he had ceased paying
premiums.
The Blank family and their industrial insurance policies in force
Aug. 11
, 19 39
Family member
Present
age
Plan of insurance
Years
in force
Amount
of insur-
ance
Annual
premium
paid by
family
41
40
77
21
16
14
13
11
9
7
6
4
( 2 )
Whole life
3
5
2
13
16
3
$300
12
180
114
216
375
$13.00
.do... . -
(0
...do
7.80
.do
0)
20.00
Whole life
7.80
home).
do
do
Whole life
• 2
334
5.20
.. .do .
Daughter, Barbara
Whole life
1
3
260
102
25
5.20
. .do.. - -
2.35
Daughter, Phyllis
5.20
Total, 13 members, 8
members insured.
1,918
66.55
« Paid up.
1 8 months.
Total income of family, $1,017.
Average annual income per family member, $85.
In addition to above policies, 10 other policies which had lapsed were in the
family's possession. (See next schedule.)
Nineteen and six-tenths percent of premiums on breadwinner.
All policies, including lapsed policies, issued by same insurance company.
Premiums as percent of income, 6.5 percent.
The family still had in their possession 10 other policies which had
lapsed and were worth nothing as they had not been in force long
enough to have acquired any nonforfeiture values. These are shown
below. Three of them were endowments, six were 20-payment-life
policies, and one was a whole-life policy.
CONCENTRATION OF ECONOMIC POWER 69
The Blank family and 10 lapsed industrial insurance policies held Aug. 11, 1939
Family member
Present
Plan of insurance
Year
issued
Amount
of insur-
ance at
issue
Annual
premium
at issue
Father, John Blank
Mother, Mary
Mother-in-law
Son, Richard (not living at
home).
Daughter, Mary
Daughter, Betty
Son, James
Son, Harry
Daughter, Helen..
Daughter, Agnes
Daughter, Barbara
Son, Bobby
Daughter, Phyllis
20-payment life.
20-year endowment.
20-payment life
20-payment life
20-year endowment.
20-payment life
1932
1932
1939
1939
1933
1939
$445
230
166
182
250
188
$13.00
13.00
5.20
5.20
13.00
5.20
15-year endowment.
20-payment life
Whole life
20-payment life
1930
1939
1932
1939
'175
200
'600
200
13.00
5.20
7.80
5.20
(»)
1 Benefit payable after 9 years in force.
* 8 months.
The story of the five policies most recently lapsed is interesting.
According to the premium receipt books, photostats of which will be
found in the appendix, on January 30, 193Q ; six 10-cent weekly-
premium 20-payment-life policies were issued, exactly 1 week after
a $6 dividend had been recorded. The weekly premium charge was
thereby increased from $1.30 to $1.90. The latter amount appeared
for 3 weeks only, two of which were provided for by the dividend
while the third was paid in cash. Thereupon, the weekly total pre-
mium dropped to $1.40, thus discontinuing payment on 5 of the 6
policies taken out three weeks previously. Since these policies were
permitted to lapse, this transaction had cost the family very heavily.
An analysis of other premium receipt books revealed that while
insurance holdings did not increase with every dividend declaration,
dividends served as the basis for additional insurance in 1933, 1936,
and 1937 as w T ell as 1939. Apparently, dividend date rather than
ability to pay went a long way in determining increases in the amount
of insurance carried.
It is interesting to record the attitude of this family toward its insur-
ance. They expressed their intention of making every effort to keep
their present insurance in force. It was the only thing they had.
They admitted that they knew nothing of the intricacies of insurance.
However, they had the greatest confidence in their agent and felt that
he would take care of them.
70
CONCENTRATION OF ECONOMIC POWER
The Jones Family
Relief Family Paying 18.1 Percent of Its Income for
Insurance — Multiple Issues of Four Industrial Endow-
ment Policies for $354 Each at Greater Cost Than for
Same Amount of Ordinary Insurance on Same Plan.
The Jones family consisted of a father 33 years old, his wife, 32
years old, and four children ranging in age from 11 to 1 year. Mr.
Jones worked as a bookkeeper on the Work Projects Administration,
where his annual income was $852. The family lived in one of the
poorer sections .of Boston where the rent was cheap. It had not
received any commodities from the Surplus Commodities Corporation
n^r anv other form of assistance, so this family of six persons was
supported solely by the earnings of Mr. Jones.
The total premiums paid annually by the Jones family were $154.25.
Since the average annual income for each family member was $142,
the amount paid for insurance exceeded the average available to sup-
port one family member for a year. Their insurance holdings were as
follows:
The Jones family
and their industrial policies ir^ force Sept.
16, 1939
Family member
Present
age
Plan of insurance
Years
in
force
Amount
of
insurance
Annual
premium
paid by
family
Father, John Jones
33
32
11
9
7
1
Endowment at age CO
do
8
8
8
8
8
10
8
9
8
7
1
$354
354
354
354
420
250
250
250
250
500
200
$10. 75
10.75
do
10.75
do
10.75
Mother, Phoebe
20- year endowment.
21.50
Son, John
do
10.00
do
10.75
Daughter, Phoebe.
do...
10.75
do
10.75
Daughter, Helen
do
21.50
Daughter, Mary
.do..
26.00
11 policies
Total, 6 members, all in-
3,536
154.25
sured.
Total income of family, $852.
Average annual income per family member, $142.
Premiums as percent of income, 18.1 percent.
Twenty-eight percent of premiums on breadwinner.
All policies issued by one insurance company.
The Jones family carried 20-year endowments on all the dependents.
Short-term endowments are the most expensive plan of insurance, but
the Jones family was apparently interested in the savings feature in-
volved in this plan. On each of the four children there was insurance
with a total ultimate face value of $500. However, in the case of the
youngest child, because of the limitations on juvenile policies the
actual insurance in force, as indicated by the schedule of the insurance
company, was only $200.
One of the notable features of this family's insurance was that the
agent had sold, and the company had issued, to Mr. Jones on the same
day four industrial policies, each providing for an endowment at age
CONCENTRATION OP ECONOMIC POWER 71
60 of $354. Mr. Jones was paying annually $43 on these policies,
with a total face value of $1,416. The insurance company had im-
posed certain limitations on the issuance of this type of policy: The
policies were to be issued with a 25-cent premium only, and the maxi-
mum premiums for all policies issued under this plan for the age of
Mr. Jones at the time was $1 a week. In other words, Mr. Jones had
to take four policies under this plan of industrial insurance to get the
amount of insurance he desired, and he took out the maximum per-
mitted. This same company was, however, issuing at the time 'an
ordinary endowment policy maturing at age 60 for which Mr. Jones
was eligible if he was an insurance risk. Under these circumstances
if Mr. Jones had been sold this policy and had paid his premiums on
a quarterly basis, in 1939 he would have been paying $44.84 annually
for $2,000 of insurance, instead of paying, as he did, $43 for $1,416
of insurance. Or, assuming that Mr. Jones was more interested in
the amount of insurance than in the premiums to be paid, a $1,500
ordinary policy of the same plan issued by the same company would
have cost Mr. Jones in 1939, paying his premiums quarterly, $33.63,
a reduction in premium payments of $9.37 annually, or 22 percent.
Curiously enough, the two older children were insured before either
of the parents, and it was about 2}{ years after the first policy was
issued that Mr. Jones himself took out insurance. Each child was
insured at about the age of 1 year, and 20-year endowments for $500
were carried on each. Only 28 percent of the total annual premiums
was paid by this family on the breadwinner
The Lombardi Family
Relief Family of 7 — Every Member Insured — All
Policies Issued After Family Went on Relief — 8 Out of 1 1
Policies on Relatively Expensive 20-Payment I lfe Plan.
This family consisted of a father aged 56, a mother aged 40, and
five children ranging in age from 18 to 2 years. Mr. Lombardi was
born in Italy, his wife in Lithuania, but all of the children were born
in the United States. They lived near North Station in Boston, on
the top floor of a tenement facing the elevated railway structure.
The Lombardis had been "on relief" since 1931. With none of the
other members of the family able to secure work, this family had been
dependent upon relief so long that it was grooved into what might
be termed a welfare existence.
This family received all of its clothing and part of its food from the
Boston Welfare Department. The family was also allowed $16 in
cash weekly to provide for rent, heat, light, and food. Estimating the
value of commodities received during the course of the year at $135,
the family's total annual income amounted to $967. What this
amount meant to the family may be judged from the fact that in the
52 weeks' period preceding the date of enumeration, this family had
consumed a total of only 8 pounds of butter which was received via a
commodity card. In addition they reported that their milk con-
sumption had to be curtailed when the price to welfare recipients was
increased from 2 cents per quart to 5 cents per quart. In spite of the
restricted budget upon which this family operated Mr. Lombardi
250783 — 40— No. 2 6
72
CONCENTRATION OF ECONOMIC POWER
considered insurance so important that 4.8 percent of total income
was spent for that purpose.
The insurance carried and in force is given below. It is important
to note that all the policies were taken out after the family went on
welfare. Apparently the insurance was being carried without the
knowledge of the authorities, for it is certain that one would not find
8 20-payment life policies out of the total 11 in force if the welfare
authorities were aware of the situation. While it seems hardly pos-
sible to justify anything but the least expensive whole-life insurance
for this family, it should be noted that every single infantile policy is a
20-payment life plan. The insurance on the entire family was handled
by one company.
In spite of the circumstances of the family, all premiums were paid
to date. To conserve as much as possible, Mr. Lombardi made it a
point to pay all premiums at the company's office in order to take ad-
vantage of the 10 percent discount on premiums. Mr. Lombardi
considered the function of insurance sufficiently important to deprive
the family of necessities in order that the insurance on the family might
be kept in force and paid to date.
The Lombardi family and their industrial policies in force Aug. 14, 1939
Family member
Pres-
ent age
Plan of insurance
Years
in
force
Amount
of insur-
ance
Annual
premium
paid by
family
, Father, Antonio Lombardi
Mother, Maria
Son, John
Son, Antonio, Jr
Daughter, Mary..
Son, Paul
Son, Frank
Total, 7 members, all in-
sured.
Whole life.
20-payment life.
Whole life
do...
20-payment life.
do..
do
do
do
do
do
11 policies, all issued after family
went on relief.
255
308
308
105
110
51
50
62
50
38
1,543
$10. 13
10.15
3.96
4.23
2.34
2.12
2.11
2.34
2.34
4.68
2.34
46.74
Total income of family, $967.
Average annual income per family member, $138.
Premiums as a percent of income, 4.8 percent.
Twenty-two percent of premiums are paid on breadwinner.
All policies issued by one insurance company.
The Roxby Family
Well-planned Insurance Program in a Negro Relief Family
of 12 ; 39 Percent of Total Premium Paid for Insurance on
Breadwinner. Maximum Protection With Savings Bank
Life Insurance at Least Cost.
George Roxby was 37 years old; his wife, Mary, was 35. They had
10 children ranging in age from 5 weeks to 14 years. George earned
$16 a week as a chauffeur. His wages were supplemented by the wel-
fare department of Boston with an allowance of food and milk at the
CONCENTRATION OF ECONOMIC POWER
73
rate of $290 per year, so that the total income of the Roxby family
was computed at $1,122 per year.
Insurance policies were carried on every member of the family except
the two youngest children. These policies were all savings bank life
insurance policies and were all written on the least expensive whole life
plan. They were all taken out on the same day in 1937. The dis-
tribution in amounts shows evidence of intelligence in the program for
the family. The father's life was insured for $1,000, the mother's life
for $500, and $300 was carried on the life of each of the insured chil-
dren, and totaled $3,900. The premiums, all paid on a monthly basis,
cost the family $51 .74 a year. Thus the Roxby family paid 4.6 percent
of its income for insurance premiums. It should be noted that 39
percent of the total premium was paid for insurance on the life of the
only breadwinner.
The Roxby family and savings-bank life insurance policies in force Sept. 8, 19S9
Family member
Pres-
ent age
Plan of insurance
Years
in force
Amount
of insur-
ance
Annual
premium
paid by
family
Father, George Roxby
Mother, Mary
Daughter
Son
Do
Daughter.,
Son
Do
Daughter...
Do
Do
Son
Total, 12 members, 10
members insured.
(')
Whole life... .
do
do...
do
.....do
do
do
do
do
do
No insurance.
do
$1,000
500
300
300
300
300
300
300
300
300
$20.06
9.35
3.13
3.03
2.02
2.02
2.81
2.81
2.81
1.01
10 policies .
3,900
51.74
1 5 weeks.
Total income of family, $1,122.
Average income per family member, $94.
Premiums as percent of family income, 4.6 percent.
Thirty-nine percent of total premium paid on breadwinner.
All policies issued by the same bank.
The Jameson Family
Nonrelief Family of Four Members — All Members In-
sured — Insurance Program Includes: Industrial, Group,
and Savings Bank Policies — 8.4% of Income Paid for
Insurance Premiums
There were four members of the Jameson family: the father, 47
years of age; the mother, 39; and two daughters, 10 and 2 years,
respectively. They lived in Watertown where the father was em-
ployed by the Hood Rubber Co. at $28 per week. Life insurance
policies were carried on all four members of the family. The amount
of insurance in force was distributed as follows:
On the only breadwinner $2, 567
On the mother 1.-618
On the 1st child 500
On the 2nd child 150
Total 4,835
74 CONCENTRATION OF ECONOMIC POWER
The various policies held by the family are shown on the accom-
panying table. Examination of the individual policies revealed an
interesting history with respect to the dates on which the various
kinds of policies were issued. The first policy issued was a 20-\ear
endowment savings-bank life insurance policy for $1,000 taken out
on the life of Mrs. Jameson in 1925. Exactly 8 days later four in-
dustrial policies were issued: two 20-payment life policies, each for
$250 on Mr. Jameson ; and two 20-payment li f e policies for the similar
amounts on the life of Mrs. Jameson. Three weeks later in the same
year, another $1,000 savings-bank life insurance 20-year endowment
Eolicy was issued on the life of Mr. Jameson, Some 2 years later
oth Mr. and Mrs. Jameson took out additional insurance, but this
was in the form of industrial policies with premiums of 5 cents each
week. Shortly after each of their children was born, industrial
policies were taken out on their lives in the same company.
It is a little hard to understand this mixture of industrial and
savings-bank life insurance — particularly how Mr. Jameson was per-
suaded to pay $23.92 a year for $500 of industrial insurance almost
on the same day that he found out he could get twice as much savings-
bank life insurance (and that on the endowment plan) for only $22.48.
In answer to the enumerator's questions it was indicated that the
family preferred to pay their premiums by the week. This may
account for the fact that in spite of their knowledge of the lower cost
of savings-bank life insurance only 2 of their 12 policies were of this
type.
The Jameson family and their insurance policies in force, Sept. 19, 1939
Family member
Present
age
Plan of insurance
Years
in force
Amount of
insurance
Annual
premium
paid by
family
Father, William Jameson.
Mother, Hannah
Daughter, Mary
Daughter, Jane
Total, 4 family members,
all insured.
39
20-payment life
do - -
20-year endowment {savings-
bank life insurance).
Whole life
Term (group)
20-year endowment (savings-
bank life insurance).
20-payment life
do.... —
Whole life
20-year endowment
do - - '
do
$250
250
1,000
67
1,000
1,000
264
264
90
250
250
150
$9.20
9.20
17.36
2.00
18.20
15.09
7.60
7.60
2.00
10.00
10.75
13.00
12 policies .
4,835
122.00
Total family income, $1,456.
Average annual income per family member, $364.
Premiums as a percent of income, 8.4 percent.
Nine industrial policies issued by one company.
Two savings bank life insurance policies issued by one bank.
Group certificate issued by a different company.
45.9 percent of premiums paid on breadwinner.
Plate 3
typical housing Conditions in Blocks Surveyed
PLATE 4
TYPICAL HOUSING CONDITIONS IN Bl_OCK=> SURVEYED
CHAPTER VII
Summary and Conclusions
Life insurance should be sold and purchased in terms of the needs
and income -of the particular family. The insurance requirements of
the individual must be viewed in the light of his place in the family.
The extent to which he contributes to the support of the family, the
degree to which the family is able to set aside a portion of its income
for insurance premiums, the age of its members, and many other sim-
ilar factors must be taken into account in determining a family's in-
surance program. These considerations apply regardless of the type
of policy or class of insurance involved and are particularly applicable
to the low-income families where margins between income and . the
amount required to purchase necessities are slim and in many cases
nonexistent. It was for this reason that this report has presented its
findings in terms of the family group rather than the individual.
In appraising the findings, therefore, one must keep in mind the
characteristics of the typical family group whose insurance holdings
are reported. The families are low-income families. Of the 1,666
insured families, 1,360 received less than $600 a year per family mem-
ber and as many as 38 percent received less than $300 a year per
family member. Furthermore, a quarter of the families were receiving
some form of public assistance. The size of the family groups and
the occupations and nationalities of their members are varied. It
may be said that these families are typical of the mass of people living
in the congested industrial communities of this country. Persons in
this class have few luxuries and indeed their standard of living is so
low that they are often actually in need.
It is evident that among families in the densely populated indus-
trial areas like those covered in the survey life insurance is purchased
more generally than had previously been supposed. The amount of
insurance in force in these families demonstrates their great desire for
security. This is borne out by the facts that 92 percent of all families
interviewed were either carrying insurance at the time or had done so
in the past; there were over 10,000 policies in force in the 1,666 in-
sured families which represented 78 percent of all families interviewed ;
and in insured families as many as 83 out of every 100 persons were
Industrial 20-year endow ment.
Industrial whole life
Industrial 15-year endowment.
Industrial 20-year endowment.
Industrial whole life.
Industrial 15-year endowment.
19 policies (5 ordinary and 14 in-
dustrial).
Years
in
force
Amount
of insur-
ance
$1,000
124
1,000
1,000
500
266
266
267
267
981
1,000
105
369
250
287
118
100
102
65
8,067
Annual
premiums
paid by
family
$29. 16
10.40
22.21
12.71
17.68
8.84
8.84
8.32
8.32
11.03
14.68
4.30
4.60
10.75
4.60
11.50
5.20
2.35
9.40
204.89
CONCENTRATION OF ECONOMIC POWER 67
Total family income, $1,248.
Average annual income per family member, $113.
Premiums as percent of income, 16.4 percent.
Two insurance companies issued these policies; one issued three ordinary and
six industrial; the other, two ordinary and eight industrial.
Percent of premiums paid on chief breadwinner, 15 percent; on other bread-
Just what the plan of insurance in this family might be is difficult
to determine. It has no apparent relationship to age, sex, or depend-
ency status. No more light is shed by an examination of the policies
issued by the two insurance companies. One company had issued
three whole-life ordinary policies, four 20-payment life industrial poli-
cies, and two 20-year endowment industrial policies. The other com-
pany had issued two ordinary whole-life policies, one 20-payment life
industrial policy, two 20-year endowment industrial policies, two 15-
year endowment industrial policies, and three whole-life industrial
policies. The periods during which these policies were taken out were
the same for both companies.
The Asta family had paid all premiums to date at the time of enu-
meration. In 1936, however, they had borrowed $19.22 on one ordi-
nary whole-life policy 2 weeks before taking out another whole-life
ordinary policy for $1,000. This loan had not been repaid. And yet
the family subsequent to the loan took out — in addition to the whole-
life ordinary policy just mentioned — six more industrial policies, two
of which were with the company which had made the loan.
The Blank Family
Relief Family — Paying 6.5 Percent of its Income for
Insurance— In Spite of Lapsation History New Policies
Issued at Time of Dividend Payments with Resulting
Lapse as Soon as Dividend Credits Exhausted.
The Blank family lived in a dilapidated house in the industrial
section of Cambridge. The family consisted of the father, mother,
mother-in-law, and 10 children ranging from 8 months to 21 years of
age. The father had been on the Work Projects Administration for
several years. Before getting on the Work Projects Administration
he had been on the welfare rolls for a period of 2 years. Prior to that
he had worked for 10 years as a laborer in a paper-stock plant where
his wages had never exceeded $18 a week. During the past 12 months
Mr. Blank had received $13.75 weekly from the Work Projects
Administration — a total of $715 for the year. However, a few days
before the supervisor called on the Blanks, Mr. Blank had been laid
off the Work Projects Administration as a result of the 30-day fur*
loughs compulsory for those who had been on tne Work Projects
Administration for 18 months or more. i'oq
During the last 12 months, contributions toward the rent plus income
in the form of food and clothes issued on a surplus commcdity card
were estimated at $280. None of the children except one of the girls
had been successful in obtaining work. Mary, aged 16, had worked
for 2 weeks in a shoe factory and had earned a total of $22. (The
whereabouts of the eldest, Richard, aged 21, was unknown.) Thus
the total annual family income for the period under consideration
68
CONCENTRATION OF ECONOMIC POWER
amounted to $1,017, and the average annual income per family mem-
ber living at home was about $85.
The present insurance in force in the Blank family is shown on the
following schedule. There were eight policies on which premiums
totalling $66.55 annually were being paid. In addition Mrs. Blank's
mother, aged 77, held a policy for $114 which was "paid up" and
Mr. Blank had a policy for $12 which had arisen as the result of the
nonforfeiture provision of a policy on which he had ceased paying
premiums.
The Blank family and their industrial insurance policies in force
Aug. 11
, 19 39
Family member
Present
age
Plan of insurance
Years
in force
Amount
of insur-
ance
Annual
premium
paid by
family
41
40
77
21
16
14
13
11
9
7
6
4
( 2 )
Whole life
3
5
2
13
16
3
$300
12
180
114
216
375
$13.00
.do... . -
(0
...do
7.80
.do
0)
20.00
Whole life
7.80
home).
do
do
Whole life
• 2
334
5.20
.. .do .
Daughter, Barbara
Whole life
1
3
260
102
25
5.20
. .do.. - -
2.35
Daughter, Phyllis
5.20
Total, 13 members, 8
members insured.
1,918
66.55
« Paid up.
1 8 months.
Total income of family, $1,017.
Average annual income per family member, $85.
In addition to above policies, 10 other policies which had lapsed were in the
family's possession. (See next schedule.)
Nineteen and six-tenths percent of premiums on breadwinner.
All policies, including lapsed policies, issued by same insurance company.
Premiums as percent of income, 6.5 percent.
The family still had in their possession 10 other policies which had
lapsed and were worth nothing as they had not been in force long
enough to have acquired any nonforfeiture values. These are shown
below. Three of them were endowments, six were 20-payment-life
policies, and one was a whole-life policy.
CONCENTRATION OF ECONOMIC POWER 69
The Blank family and 10 lapsed industrial insurance policies held Aug. 11, 1939
Family member
Present
Plan of insurance
Year
issued
Amount
of insur-
ance at
issue
Annual
premium
at issue
Father, John Blank
Mother, Mary
Mother-in-law
Son, Richard (not living at
home).
Daughter, Mary
Daughter, Betty
Son, James
Son, Harry
Daughter, Helen..
Daughter, Agnes
Daughter, Barbara
Son, Bobby
Daughter, Phyllis
20-payment life.
20-year endowment.
20-payment life
20-payment life
20-year endowment.
20-payment life
1932
1932
1939
1939
1933
1939
$445
230
166
182
250
188
$13.00
13.00
5.20
5.20
13.00
5.20
15-year endowment.
20-payment life
Whole life
20-payment life
1930
1939
1932
1939
'175
200
'600
200
13.00
5.20
7.80
5.20
(»)
1 Benefit payable after 9 years in force.
* 8 months.
The story of the five policies most recently lapsed is interesting.
According to the premium receipt books, photostats of which will be
found in the appendix, on January 30, 193Q ; six 10-cent weekly-
premium 20-payment-life policies were issued, exactly 1 week after
a $6 dividend had been recorded. The weekly premium charge was
thereby increased from $1.30 to $1.90. The latter amount appeared
for 3 weeks only, two of which were provided for by the dividend
while the third was paid in cash. Thereupon, the weekly total pre-
mium dropped to $1.40, thus discontinuing payment on 5 of the 6
policies taken out three weeks previously. Since these policies were
permitted to lapse, this transaction had cost the family very heavily.
An analysis of other premium receipt books revealed that while
insurance holdings did not increase with every dividend declaration,
dividends served as the basis for additional insurance in 1933, 1936,
and 1937 as w T ell as 1939. Apparently, dividend date rather than
ability to pay went a long way in determining increases in the amount
of insurance carried.
It is interesting to record the attitude of this family toward its insur-
ance. They expressed their intention of making every effort to keep
their present insurance in force. It was the only thing they had.
They admitted that they knew nothing of the intricacies of insurance.
However, they had the greatest confidence in their agent and felt that
he would take care of them.
70
CONCENTRATION OF ECONOMIC POWER
The Jones Family
Relief Family Paying 18.1 Percent of Its Income for
Insurance — Multiple Issues of Four Industrial Endow-
ment Policies for $354 Each at Greater Cost Than for
Same Amount of Ordinary Insurance on Same Plan.
The Jones family consisted of a father 33 years old, his wife, 32
years old, and four children ranging in age from 11 to 1 year. Mr.
Jones worked as a bookkeeper on the Work Projects Administration,
where his annual income was $852. The family lived in one of the
poorer sections .of Boston where the rent was cheap. It had not
received any commodities from the Surplus Commodities Corporation
n^r anv other form of assistance, so this family of six persons was
supported solely by the earnings of Mr. Jones.
The total premiums paid annually by the Jones family were $154.25.
Since the average annual income for each family member was $142,
the amount paid for insurance exceeded the average available to sup-
port one family member for a year. Their insurance holdings were as
follows:
The Jones family
and their industrial policies ir^ force Sept.
16, 1939
Family member
Present
age
Plan of insurance
Years
in
force
Amount
of
insurance
Annual
premium
paid by
family
Father, John Jones
33
32
11
9
7
1
Endowment at age CO
do
8
8
8
8
8
10
8
9
8
7
1
$354
354
354
354
420
250
250
250
250
500
200
$10. 75
10.75
do
10.75
do
10.75
Mother, Phoebe
20- year endowment.
21.50
Son, John
do
10.00
do
10.75
Daughter, Phoebe.
do...
10.75
do
10.75
Daughter, Helen
do
21.50
Daughter, Mary
.do..
26.00
11 policies
Total, 6 members, all in-
3,536
154.25
sured.
Total income of family, $852.
Average annual income per family member, $142.
Premiums as percent of income, 18.1 percent.
Twenty-eight percent of premiums on breadwinner.
All policies issued by one insurance company.
The Jones family carried 20-year endowments on all the dependents.
Short-term endowments are the most expensive plan of insurance, but
the Jones family was apparently interested in the savings feature in-
volved in this plan. On each of the four children there was insurance
with a total ultimate face value of $500. However, in the case of the
youngest child, because of the limitations on juvenile policies the
actual insurance in force, as indicated by the schedule of the insurance
company, was only $200.
One of the notable features of this family's insurance was that the
agent had sold, and the company had issued, to Mr. Jones on the same
day four industrial policies, each providing for an endowment at age
CONCENTRATION OP ECONOMIC POWER 71
60 of $354. Mr. Jones was paying annually $43 on these policies,
with a total face value of $1,416. The insurance company had im-
posed certain limitations on the issuance of this type of policy: The
policies were to be issued with a 25-cent premium only, and the maxi-
mum premiums for all policies issued under this plan for the age of
Mr. Jones at the time was $1 a week. In other words, Mr. Jones had
to take four policies under this plan of industrial insurance to get the
amount of insurance he desired, and he took out the maximum per-
mitted. This same company was, however, issuing at the time 'an
ordinary endowment policy maturing at age 60 for which Mr. Jones
was eligible if he was an insurance risk. Under these circumstances
if Mr. Jones had been sold this policy and had paid his premiums on
a quarterly basis, in 1939 he would have been paying $44.84 annually
for $2,000 of insurance, instead of paying, as he did, $43 for $1,416
of insurance. Or, assuming that Mr. Jones was more interested in
the amount of insurance than in the premiums to be paid, a $1,500
ordinary policy of the same plan issued by the same company would
have cost Mr. Jones in 1939, paying his premiums quarterly, $33.63,
a reduction in premium payments of $9.37 annually, or 22 percent.
Curiously enough, the two older children were insured before either
of the parents, and it was about 2}{ years after the first policy was
issued that Mr. Jones himself took out insurance. Each child was
insured at about the age of 1 year, and 20-year endowments for $500
were carried on each. Only 28 percent of the total annual premiums
was paid by this family on the breadwinner
The Lombardi Family
Relief Family of 7 — Every Member Insured — All
Policies Issued After Family Went on Relief — 8 Out of 1 1
Policies on Relatively Expensive 20-Payment I lfe Plan.
This family consisted of a father aged 56, a mother aged 40, and
five children ranging in age from 18 to 2 years. Mr. Lombardi was
born in Italy, his wife in Lithuania, but all of the children were born
in the United States. They lived near North Station in Boston, on
the top floor of a tenement facing the elevated railway structure.
The Lombardis had been "on relief" since 1931. With none of the
other members of the family able to secure work, this family had been
dependent upon relief so long that it was grooved into what might
be termed a welfare existence.
This family received all of its clothing and part of its food from the
Boston Welfare Department. The family was also allowed $16 in
cash weekly to provide for rent, heat, light, and food. Estimating the
value of commodities received during the course of the year at $135,
the family's total annual income amounted to $967. What this
amount meant to the family may be judged from the fact that in the
52 weeks' period preceding the date of enumeration, this family had
consumed a total of only 8 pounds of butter which was received via a
commodity card. In addition they reported that their milk con-
sumption had to be curtailed when the price to welfare recipients was
increased from 2 cents per quart to 5 cents per quart. In spite of the
restricted budget upon which this family operated Mr. Lombardi
250783 — 40— No. 2 6
72
CONCENTRATION OF ECONOMIC POWER
considered insurance so important that 4.8 percent of total income
was spent for that purpose.
The insurance carried and in force is given below. It is important
to note that all the policies were taken out after the family went on
welfare. Apparently the insurance was being carried without the
knowledge of the authorities, for it is certain that one would not find
8 20-payment life policies out of the total 11 in force if the welfare
authorities were aware of the situation. While it seems hardly pos-
sible to justify anything but the least expensive whole-life insurance
for this family, it should be noted that every single infantile policy is a
20-payment life plan. The insurance on the entire family was handled
by one company.
In spite of the circumstances of the family, all premiums were paid
to date. To conserve as much as possible, Mr. Lombardi made it a
point to pay all premiums at the company's office in order to take ad-
vantage of the 10 percent discount on premiums. Mr. Lombardi
considered the function of insurance sufficiently important to deprive
the family of necessities in order that the insurance on the family might
be kept in force and paid to date.
The Lombardi family and their industrial policies in force Aug. 14, 1939
Family member
Pres-
ent age
Plan of insurance
Years
in
force
Amount
of insur-
ance
Annual
premium
paid by
family
, Father, Antonio Lombardi
Mother, Maria
Son, John
Son, Antonio, Jr
Daughter, Mary..
Son, Paul
Son, Frank
Total, 7 members, all in-
sured.
Whole life.
20-payment life.
Whole life
do...
20-payment life.
do..
do
do
do
do
do
11 policies, all issued after family
went on relief.
255
308
308
105
110
51
50
62
50
38
1,543
$10. 13
10.15
3.96
4.23
2.34
2.12
2.11
2.34
2.34
4.68
2.34
46.74
Total income of family, $967.
Average annual income per family member, $138.
Premiums as a percent of income, 4.8 percent.
Twenty-two percent of premiums are paid on breadwinner.
All policies issued by one insurance company.
The Roxby Family
Well-planned Insurance Program in a Negro Relief Family
of 12 ; 39 Percent of Total Premium Paid for Insurance on
Breadwinner. Maximum Protection With Savings Bank
Life Insurance at Least Cost.
George Roxby was 37 years old; his wife, Mary, was 35. They had
10 children ranging in age from 5 weeks to 14 years. George earned
$16 a week as a chauffeur. His wages were supplemented by the wel-
fare department of Boston with an allowance of food and milk at the
CONCENTRATION OF ECONOMIC POWER
73
rate of $290 per year, so that the total income of the Roxby family
was computed at $1,122 per year.
Insurance policies were carried on every member of the family except
the two youngest children. These policies were all savings bank life
insurance policies and were all written on the least expensive whole life
plan. They were all taken out on the same day in 1937. The dis-
tribution in amounts shows evidence of intelligence in the program for
the family. The father's life was insured for $1,000, the mother's life
for $500, and $300 was carried on the life of each of the insured chil-
dren, and totaled $3,900. The premiums, all paid on a monthly basis,
cost the family $51 .74 a year. Thus the Roxby family paid 4.6 percent
of its income for insurance premiums. It should be noted that 39
percent of the total premium was paid for insurance on the life of the
only breadwinner.
The Roxby family and savings-bank life insurance policies in force Sept. 8, 19S9
Family member
Pres-
ent age
Plan of insurance
Years
in force
Amount
of insur-
ance
Annual
premium
paid by
family
Father, George Roxby
Mother, Mary
Daughter
Son
Do
Daughter.,
Son
Do
Daughter...
Do
Do
Son
Total, 12 members, 10
members insured.
(')
Whole life... .
do
do...
do
.....do
do
do
do
do
do
No insurance.
do
$1,000
500
300
300
300
300
300
300
300
300
$20.06
9.35
3.13
3.03
2.02
2.02
2.81
2.81
2.81
1.01
10 policies .
3,900
51.74
1 5 weeks.
Total income of family, $1,122.
Average income per family member, $94.
Premiums as percent of family income, 4.6 percent.
Thirty-nine percent of total premium paid on breadwinner.
All policies issued by the same bank.
The Jameson Family
Nonrelief Family of Four Members — All Members In-
sured — Insurance Program Includes: Industrial, Group,
and Savings Bank Policies — 8.4% of Income Paid for
Insurance Premiums
There were four members of the Jameson family: the father, 47
years of age; the mother, 39; and two daughters, 10 and 2 years,
respectively. They lived in Watertown where the father was em-
ployed by the Hood Rubber Co. at $28 per week. Life insurance
policies were carried on all four members of the family. The amount
of insurance in force was distributed as follows:
On the only breadwinner $2, 567
On the mother 1.-618
On the 1st child 500
On the 2nd child 150
Total 4,835
74 CONCENTRATION OF ECONOMIC POWER
The various policies held by the family are shown on the accom-
panying table. Examination of the individual policies revealed an
interesting history with respect to the dates on which the various
kinds of policies were issued. The first policy issued was a 20-\ear
endowment savings-bank life insurance policy for $1,000 taken out
on the life of Mrs. Jameson in 1925. Exactly 8 days later four in-
dustrial policies were issued: two 20-payment life policies, each for
$250 on Mr. Jameson ; and two 20-payment li f e policies for the similar
amounts on the life of Mrs. Jameson. Three weeks later in the same
year, another $1,000 savings-bank life insurance 20-year endowment
Eolicy was issued on the life of Mr. Jameson, Some 2 years later
oth Mr. and Mrs. Jameson took out additional insurance, but this
was in the form of industrial policies with premiums of 5 cents each
week. Shortly after each of their children was born, industrial
policies were taken out on their lives in the same company.
It is a little hard to understand this mixture of industrial and
savings-bank life insurance — particularly how Mr. Jameson was per-
suaded to pay $23.92 a year for $500 of industrial insurance almost
on the same day that he found out he could get twice as much savings-
bank life insurance (and that on the endowment plan) for only $22.48.
In answer to the enumerator's questions it was indicated that the
family preferred to pay their premiums by the week. This may
account for the fact that in spite of their knowledge of the lower cost
of savings-bank life insurance only 2 of their 12 policies were of this
type.
The Jameson family and their insurance policies in force, Sept. 19, 1939
Family member
Present
age
Plan of insurance
Years
in force
Amount of
insurance
Annual
premium
paid by
family
Father, William Jameson.
Mother, Hannah
Daughter, Mary
Daughter, Jane
Total, 4 family members,
all insured.
39
20-payment life
do - -
20-year endowment {savings-
bank life insurance).
Whole life
Term (group)
20-year endowment (savings-
bank life insurance).
20-payment life
do.... —
Whole life
20-year endowment
do - - '
do
$250
250
1,000
67
1,000
1,000
264
264
90
250
250
150
$9.20
9.20
17.36
2.00
18.20
15.09
7.60
7.60
2.00
10.00
10.75
13.00
12 policies .
4,835
122.00
Total family income, $1,456.
Average annual income per family member, $364.
Premiums as a percent of income, 8.4 percent.
Nine industrial policies issued by one company.
Two savings bank life insurance policies issued by one bank.
Group certificate issued by a different company.
45.9 percent of premiums paid on breadwinner.
Plate 3
typical housing Conditions in Blocks Surveyed
PLATE 4
TYPICAL HOUSING CONDITIONS IN Bl_OCK=> SURVEYED
CHAPTER VII
Summary and Conclusions
Life insurance should be sold and purchased in terms of the needs
and income -of the particular family. The insurance requirements of
the individual must be viewed in the light of his place in the family.
The extent to which he contributes to the support of the family, the
degree to which the family is able to set aside a portion of its income
for insurance premiums, the age of its members, and many other sim-
ilar factors must be taken into account in determining a family's in-
surance program. These considerations apply regardless of the type
of policy or class of insurance involved and are particularly applicable
to the low-income families where margins between income and . the
amount required to purchase necessities are slim and in many cases
nonexistent. It was for this reason that this report has presented its
findings in terms of the family group rather than the individual.
In appraising the findings, therefore, one must keep in mind the
characteristics of the typical family group whose insurance holdings
are reported. The families are low-income families. Of the 1,666
insured families, 1,360 received less than $600 a year per family mem-
ber and as many as 38 percent received less than $300 a year per
family member. Furthermore, a quarter of the families were receiving
some form of public assistance. The size of the family groups and
the occupations and nationalities of their members are varied. It
may be said that these families are typical of the mass of people living
in the congested industrial communities of this country. Persons in
this class have few luxuries and indeed their standard of living is so
low that they are often actually in need.
It is evident that among families in the densely populated indus-
trial areas like those covered in the survey life insurance is purchased
more generally than had previously been supposed. The amount of
insurance in force in these families demonstrates their great desire for
security. This is borne out by the facts that 92 percent of all families
interviewed were either carrying insurance at the time or had done so
in the past; there were over 10,000 policies in force in the 1,666 in-
sured families which represented 78 percent of all families interviewed ;
and in insured families as many as 83 out of every 100 persons were
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