THE VICTIMS OF INDUSTRIAL ASSURANCE
By W. E. MASHFORD
THE systematic and continuous exploitation of the working classes through Industrial Assurance is an evil on an immense scale which has never been adequately exposed. Year in and year out the poor of this country are induced to part with huge sums of money for utterly disproportionate benefits. Itinerant agents by the thousand are daily badgering working men's wives to take out insurance policies on the lives of their husbands, their children, their parents, or for burial benefits, involving weekly payments the suspension of which involves either the lapsing of the whole policy, or the payment of some utterly negligible sum as surrender value. If the real facts relating to this business had been fully explained to the public, Parliament would long ago have been compelled to take drastic steps to reform it. The figures which I append demonstrate incontrovertibly the need for inquiry and action.
I begin with the fact that the number of policies which have lapsed during the past fifteen years amount to over 100,000,000, the owners of which have, in at least 80 per cent, of the cases, lost the whole of the premiums paid. From the close of the Great War to the year ending 1931 the figures are as follows : Income of Companies and Societies Management Expenses and Dividends to Shareholders ..
Policyholders received in return only.. .. Invested Funds have increased by .. The dividends to Shareholders are three times greater than in 1919, and in 1931 they amounted to (free of tax) .. .. £2,144,072
During the three years ending 1931 the dividends were increased by no less than £490,000, and amounted in some cases to approximately 100 per cent. and in others to 50 per cent., free of tax, on an inflated capital of which only an infinitesimal part had been paid up. During the same period (1929-1931) the income of the Companies and Societies engaged in this business was upwards of £127,000,000 after the payment of every claim. These staggering amounts were secured during the three years of grave National crisis, when all and sundry were called upon to make sacrifices in the nation's interest ; but these institutions made greater profits than ever before, largely in consequence of the misery and mis- fortunes of the people.
Behind these colossal figures lies many a heart-rending tragedy of sacrifice, and only those who, like myself, come daily in contact with those who have paid and lost can realize how great are the sufferings of the people who pay their money to these institutions instead of investing it in the post-offices and savings-banks of the country. The amazing feature of the business is that it is designated as a form of thrift, but in view of the figures quoted and the fact that the people pay nearly three times the amount they receive in return, I can only suggest that it is sheer exploitation of the thriftiest section of the people, who endeavour by this foolish method to provide for the future.
How the policyholders suffer can only be realized by those who have before them the actual documentary proof of the amounts paid in premiums and the sums paid up by the companies. As examples of how the people are treated by Industrial Assurance Companies and Societies I quote the following : 1. Mrs. B. of Hull paid a weekly premium of 5s. on the life of her mother and father for over three years, amounting in all to £44 on policies value £36, and in
£772,468,183 £314,981,597 £271,599,864 £215,000,000
return she has been granted Free Policies for £4 4s., payable at the death of the persons whose lives are assured. Altogether, this woman has paid approximately £100, for which she has never received a single penny in return. Today she is living in abject poverty and she has no claim to a single penny of the moneys so foolishly paid to these concerns.
2. Mrs. B. of Hull paid premiums amounting to £118 18s. to an insurance company, and when poverty came along and she could no longer continue she was granted free policies for £36 4s. ; and as some of the policies are on young lives it may be 50 years hence before the company concerned are called upon to disgorge this amount, 3. Mrs. C. of Hull commenced to pay ls. per week to an insurance company in 1925 and from that date to 1934 she paid £21 7s. 8d. on this life, but in the meantime she had been lapsed twice. In January of this year she owed 14s. on this policy and was per- suaded to let the policy lapse and re-insure. After collecting premiums on the new transaction which was supposed to have been entered into, the company refused to continue to accept the premiums and the total result is that this woman has paid £21 7s. 8d. for which some day, probably ten or more years hence, she will receive the sum of £3 7s. in return.
4. Mrs. G. of Bridlington was induced to pay a weekly premium of 2s. 8d. to an insurance company on an endowment policy payable at the expiration of 15 years from date of entry. The total premiums during that period would amount to £104, and in the event of her death prior to that date her relatives would receive £50 plus £1 per annum bonus addition. After paying £23 she was no longer able to continue, and no benefit at all is due under the policy.
The cases quoted are quite legal transactions, but there are millions of transactions entered into all over the country, mainly by women who are over-persuaded by canvassers and agents, which are illegal, and for which the persons concerned could not claim a single penny in return for the moneys paid. When these transactions are discovered the companies and societies are only called upon to grant cash surrender values, which are, in most cases, only about one-seventh of the premiums paid. As an example I may give the case of Mrs. M. of Hull who paid £20 16s. on an illegal policy value £20 12s. and after her death the husband discovered the true position and the company have returned £3 10s. for the £20 16s. paid on this policy. I can quote many similar cases. The victims are, in the main, illiterate and uneducated women.
The business ought to be taken over by the nation and run on the lines of National Health Insurance. It is of vital importance to the nation that steps should be immediately taken to have the whole business placed on a sound and honest basis. It is amazing that the ratepayers and taxpayers of the country should have remained silent whilst these companies have accumulated invested funds amounting to £300,000,000 to which they are adding from £15,000,000 to £20,000,000 per annum out of the moneys secured under such one-sided contracts. The cases which I have quoted are typical of tens of thousands which I have dealt with during the past 30 years.
At the present moment many millions of pounds are morally due to poor families who have no hope of recovering their money ; and there is no organiza- tion in existence in this country to assist these helpless people to secure justice. Nor is there any supervision of any kind over the doings of these com- panies and societies who are collecting approximately £60,000,000 per year from the cottage homes of Great Britain.
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