My future husband mentioned in a recent conversation that he had a life assurance policy, and if he died the benefactor would get a rather large sum. Of course I don’t want him to die, but it’s been worrying me because I'll be all by myself if he goes . . . is it up to him to whom he leaves the money? . . . Should I ask him?This recent Agony Column letter, loaded with what seems premature anxiety, is in fact a proper response to the insurance companies, who seek to sell their wares by applying a subtle mixture of comfort and neurosis.
Consider, for example, the case of the leaks of radioactivity from Windscale. The Central Electricity Generating Board, clearly an organisation which unflinchingly faces reality, admits that radioactive material can escape from nuclear power plants. But ordinary insurance policies on houses specifically exclude liability for radiation damage. So, in the event of a ‘major’ leak, the insurance industry has agreed to pay the first £5 million of any claims to people they describe as householders: the rest would be up to the government.
Which sounds very reassuring and protective, except that a major leak would probably leave very few people to make a claim, let alone capable of working out who is responsible for paying what. An apt illustration of the confidence trick which goes under the name of insurance.
From the day we are born, we are assailed by insurance companies trying to make someone pay out on a policy on us. Just let a baby emerge from its mother’s womb, and there is a salesman genially suggesting that the parents take out a policy payable on their newborn infant’s death.
Such practices are rooted in a disreputable history. The first known policy on a life was taken out on one William Gibbons in 1583; it ended with the fervent wish, “God send the said William Gibbons health and long life’’, which at least showed that the underwriters were leaving nothing to chance. As life assurance grew there was widespread speculation in lives; anyone with the money could take out a policy payable on the death of some well-known figure, presumably then praying that health and long life would not attend that said person.
This racket was ended by the Life Assurance Act of 1774 (known appropriately as the Gambling Act), which voided life policies in which the insurer did not have an interest. This remains the situation today, when there are insurances to cover accidents at home, at work, on holiday, playing sport. Others are a form of saving which give a lump sum when you have been paying over a long enough period; others can pay for a private education or, say, a weather-wrecked vacation.
All of this is expressed in the industry’s advertisements, which tell us that the only secure, contented person is one who is almost suffocating beneath insurance policies. These ads sometimes work through menace —‘Think how you’ll almost starve to death if you ever have an accident/fall ill/ set fire to your home/grow old . . .’, and sometimes through comfort - ‘Nothing terrible is going to happen to you, but if it does and you drop dcad/lose your job/need some money in a hurry, your family will be taken care of . . .' One insurance advertisement puts it neatly, unctuously, threateningly —
It’s quite likely your insurance can no longer do what you bought it to do. Namely, to give your loved ones an ample sum of money for your last expenses and unpaid debts . . . an ample sum of money which can help replace your earnings.This all sounds very welcoming, so it comes as a nasty surprise to someone who wants to take out a policy to find that it can be rather difficult. The premiums are worked out by using a mortality table — a grisly process of fixing the likelihood of someone dying according to their age, occupation, where they live, and so on. (There is a profession which trains people to do this; when they’ve passed all their exams they are called actuaries.)
The insurance companies need to be reassured that they are not taking on a bad risk, the hopeful customer must submit to a medical examination, fill in forms which ask searching, intimate questions, and agree to reports on their habits, manner of living, finances. Some jobs find lesser favour with the insurance firms — butchers in slaughterhouses, for example, or grocers in Scotland and Ireland. A publican hoping to insure his life will find problems: “Most offices do not encourage proposals on the lives of publicans, and even in the most favourable circumstances may charge an extra premium.’’ (Life Assurance from Proposal to Policy, L.J. New).
At the end of this process the subject’s life will be classified. If it rates ‘good’, the company will happily welcome them into its band of premium payers; if ‘sub-standard’, they will get in only with difficulty and then probably by paying extra. It is better not to discuss the fate of those outcasts who come out of their assessment as 'uninsurable’.
In spite of all this, workers practically queue up to force money into the insurance companies’ coffers. During 1977, companies in the British Insurance Association (which excludes members of Lloyds) collected premiums for fire and accident (excluding motor) policies amounting to £1,463 million. Premiums for life insurance came to £3,510 million. Last year the industry was booming:
Guardian Royal Exchange — All Premiums £619.7 million. Pre-tax profits £83.3 million. (“An excellent year. . .”)Compelled
Sun Life — All Premiums £163.4 million. (“ . . . exceptionally high level of business.)
Royal Insurance — All Premiums £1,220.1 million. Pre-tax profits £153 million. (“A substantial rise in profits for the fourth year in succession.’’)
Apart from the private sector of insurance, there is the massive state-organised scheme in which most workers are compelled to participate. This had its origins in this country in 1912, and now covers medical treatment, unemployment pay, social security benefits, pensions . . . all in all, it leaves the working class to go about their daily lives under a massive blanket of insurance which, they are encouraged to believe, gives them security.
The theory behind this is that workers can function under capitalism only if they exercise thrift. Pay now, live later, is the message of insurance. There is no mention that we pay during what may be called the best years of our lives, when we are healthier and more active and hope to live easier during the worst years when we are frail and liable to be sick. In Britain, men retire at 65 and women at 60, after having paid insurance of one sort or another for something like 45 years. The general life expectancy of British men is a little more than 68 years, which means that statistically they can expect to enjoy the rewards of their thrift for about four years.
This illustrates the cruel deception of the insurance business. We can take the matter further by asking why such a deception should be so attractive to millions of people? Why should we save money in fear of natural events like death? Why should the birth of a baby be something like a financial catastrophe, or illness bring added worries about money?
It does not need a very perceptive mind to realise that such problems are confined to certain people in society. Those who, in simple terms, have enough money, are not troubled about the cost of bringing up children; if the baby is a boy, the only niggling worry might be whether there is time to reserve a place for him at Eton. When someone dies, their only concern must be whether the will has been so composed as to avoid all possible death duties (that of the late Duke of Westminster was said to be a masterpiece of such subtlety). Retirement is also no bother, since this social class does not need to work for their living and in most cases demonstrate their freedom most obviously.
The pressure to be thfifty, to insure their lives, is really on the working class, who do not go to Eton and who do not need to write elaborate wills in order to dispose of the right to pay their HP debts. These are the people who depend on working for a wage in order to live — and, again, we do not need to be very perceptive to realise that they make up the vast majority of the world’s population.
When workers are unable to work, their wages disappear; they are barely able to survive: As we have seen, the state now makes sure that they do survive — just — which at least prevents the streets being clogged with destitute people. This is the pressure upon workers to practise thrift, to put something by for a rainy day, to organise their budget, to accept the rightness of their place on the lower rungs of the social ladder. Put in another way, this is the pressure on the subject class under capitalism to comply with that social system with its private property, its degradation and its insecurity.
Most workers view the stigma of their class uncomplainingly, even cheerfully. Most of them regard their exploitation as natural, when in reality it is inhuman and distorting. There are many symbols of working class degradation and of their blindness to it. That famous Man from the Pru, with his smooth talk and his briefcase full of Pay Now and Live — if you’re lucky — Later, is one of them.