A Message from Peggy Chong, The Blind History Lady
Thanksgiving will be here soon. I have much to be thankful for in my life. This year, I am adding one more item to the list of things to be thankful for every year, fair insurance.
Five decades ago, the beginnings of legislation passed state houses, forbidding discrimination in issuing life insurance solely on the basis of blindness. It took years before a national law was passed and several more years before insurance companies across the United States got the message. Today we rarely hear of a blind person unable to secure life insurance because they are blind.
I came across this long article, written 100 years ago, documenting the policies regarding the blind in the insurance companies of the United States. It shows how far we have come. I hope you will read it all the way through.
Happy Thanksgiving.
Outlook for the Blind December 1923
Life Insurance for the Blind
By Robert B. Irwin
Director, Bureau of Research,
American Foundation for the Blind, Inc.
There is a general impression among blind people and their friends that very few life insurance companies will insure persons without sight. Furthermore, it is almost universally supposed that no company will insure a blind person except upon terms very disadvantageous to the insured. Accordingly, the Director of the Bureau of Research of the American Foundation for the Blind has undertaken to investigate and report upon this subject. A questionnaire was sent to 120 representative life insurance companies in the United States and Canada. Forty-five companies have been discovered who will accept blind persons as risks under certain conditions. Some of these companies make it a regular practice to insure selected blind persons on certain plans without any special increase in premium, and a few others will accept selected blind persons without the additional premium, but with certain restrictions as to the amount of the policy.
A considerable number of life insurance companies in the United States and Canada who make a practice of issuing sub-standard policies will insure blind people. These, however, charge persons without sight a premium ranging from $2.50 to approximately $10 per thousand annually in excess of the premium charged persons of corresponding age and
health who enjoy sight. These premiums are based upon various methods of calculation, and, with the exception of a group of Canadian companies, present very little uniformity.
Three considerations enter into the computation of life insurance premiums:
First, the mortality rate.
Second, the amount which can be earned at compound interest on premiums paid in from year to year.
Third, the amount which should be charged to meet operating expenses and unforeseen contingencies.
For the purposes of this article, we may ignore the two latter factors, as they are little, if any, affected by the incident of blindness.
In calculating premiums to be charged individuals, companies must determine an amount which in the case of the average person will accumulate a sufficient fund to meet the death claim when it falls due. A shortage in receipts from persons dying below the average age must be offset by premiums paid by those dying above the average age.
The American Experience Table of Mortality, upon which most life insurance companies base their predictions as to the probability of death among their policy-holders, was computed from a study of a large number of persons who had been insured over a period of years. This study showed that in a large group of, say, 100,000 persons, taken more or less at random from the community, it is possible to predict with a surprising degree of accuracy what percentage will die before reaching any particular year. For example, in a group of 100,000 persons of ten years of age, 11% will have died before they have reached 26 years of age, 22% will have died before they have reached 41 years of age, and 43% will have died before they have reached 61 years of age. Among the 100,000 studied in this table all but three had died before reaching 95, and before reaching 96 all had been gathered to their fathers. Accordingly, life insurance premiums are calculated in such a way that by age 95 the insured will have paid in the entire amount of premiums required of him to satisfy the statistical basis upon which premiums are determined. In the 96th year, therefore, he is statistically dead and the policy should be paid.
It should be said in passing that insurance companies today have in actual practice so carefully selected their “risks” that their experience is generally considerably more favorable than the American Experience Table. This is one of the sources of dividends.
This table was prepared from experience with persons enjoying sight. The question which must be taken into account by life insurance managements when confronted by a blind applicant is whether or not the lack of sight affects in any way his longevity. In the words of the Medical Director of one of the conservative companies, “The question we must ask and answer is, ‘Has this man the same chances of reaching old age that any other man of his age would enjoy?’”
No extensive investigation has yet been made as to the relation between blindness and length of life. It is generally held by life insurance managements that disease, accident and suicide are much more prevalent among the blind than among the sighted. The only study which has been made is one involving 145 persons. During the period studied there should have been, according to the American Experience Table, nine deaths in this group. As a matter of fact, there were fifteen deaths. Another striking feature was that six deaths out of the fifteen resulted from accident or suicide. While it is universally conceded that 145 cases do not constitute a sufficiently large number to warrant the drawing of any conclusions, the fact remains that many conclusions have been drawn from these figures. For example, the replies to the questionnaire sent to the medical directors of the insurance companies contained time and again such statements as:
‘The desire to state that such cases are declined. Our decision is based largely upon the findings of the Medico-Actuarial Committee, who reported almost twice as many deaths as expected in this class. Over one-third of the deaths were due to accident or suicide.”
“Our rating in these cases is based upon the information furnished in the report of the Medico-Actuarial Investigating Committee, which in turn is the result of a study of an experience of some twenty or more of the larger life insurance companies of the United States.”
* See Vol. 4, Part I., Report of Medico-Actuarial Investigation Committee, page 23.
– From one insurance company which does not rate up blind people we have
received the following:
“Frankly, we feel that our practice is exceedingly liberal, particularly as to the form of policy which we have issued up to the present time. Without doubt there is some extra risk involved, particularly in respect to accidents. This is borne out by the published records of the Medico-Actuarial investigation.”
If the findings of the actuarial committee had been based upon a sufficiently large amount of data, the scientific way of preparing a scale of premiums would be to increase the premium by an amount which would exactly allow for this excess mortality. Certain insurance companies seem actually to have taken these figures at approximately their face value, as we find that several report that they have calculated a premium based upon an expected mortality ranging from 40% to 75% in excess of the normal. Other insurance companies seem to have disregarded entirely the findings of the actuarial committee, as will be gathered from such replies as :
*It has been our general practice to decline applicants for insurance who are blind. We have been influenced in this direction by the fact that we could not find any statistics showing the mortality rates to be expected among blind people.”
And,
* It should be borne in mind that by making an allowance _ for 50% increase in mortality, the premium is not increased as much as 50%, since mortality is but one of three elements to be considered in calculating an annual premium.
“So far as I know there are no reliable mortality statistics which would establish the rate of mortality among insured risks of this class.”
For the most part, the whole practice of fixing life insurance premiums is based upon guesses, sufficiently liberal to protect the company against error. One company says, “This is rather an arbitrary rating and is not based upon any very scientific data,” and another states, “The rating for such risks is perhaps based more upon the judgment of underwriters than upon actual mortality statistics.”
A company which rates up blind risks but slightly indicates its nervousness about such business in the following remark:
“We limit to the endowment plan as we wish to get off of the risk before the applicant passes middle life, as we believe the hazard becomes greater after that time.”
During recent years there has been a rapid increase in the number of companies doing sub-standard business. In the absence of adequate information upon the mortality of blind persons, there has been considerable copying by one insurance company of the practice of others which have been in the field longer. It is encouraging to note that some of the companies have recently revised their scales, giving the blind more favorable treatment, and those which have been most liberal report that their experience with such risks has been very satisfactory. To quote the Medical Director of one company, which insures a limited number of select blind persons without rating them up,
“Accepted in this conservative way, I am safe in my statement that our experience has been as favorable with blind applicants as with those who have their sight.”
It should be said here that one investigating this field gains the distinct impression that life insurance managements are anxious to be as generous as possible toward the blind, consistent with the interests of their other policy-holders.
It is interesting to note that many life insurance companies take into consideration the relative ability of blind people to take care of themselves. For instance, one company accepts only such blind people as have lost their sight at an early age. Another states:
*’A special rating is applied in such cases, depending upon the kind of policy we issue and also upon the cause of blindness and the development of the applicant’s other faculties.”
Another reports as follows:
”We issue certain plans of insurance after we have investigated the cause of the blindness
and their ability to take care of themselves.”
In the regulations of still another company we find the following:
“Blindness of both eyes requires an extra premium of from $2.50 to $10 per $1,000, according to the plan, and depending also upon cause and development of faculties.”
In justice to all concerned, it is only the part of wisdom for insurance companies to maintain a conservative attitude toward the assumption of a new class of risks. There are many good reasons, however, why the question of the proper rating of persons without sight should not be passed upon adversely from superficial evidence.
While there is a general impression that blind persons are more liable to death from accident than other people, there is good reason to believe that a careful study would show that persons without sight have been so impressed with the dangers due to modern traffic conditions that as a rule they do not take the chances assumed by the average individual with sight. This is especially true of blind women. Blind women lead such secluded lives that it would probably be found upon investigation that accidental death among them is far less prevalent than among women with sight.
The 145 cases studied by the Medico-Actuarial Committee included persons who had lost their sight after their lives had been insured, or, in other words, the group was composed for the most part of persons who had lost their sight after reaching adult life. Naturally, such persons are much more liable to death from accident or suicide than are those who lose their sight early in life and who learn to adjust themselves to the condition
of blindness before taking out life insurance.
Since companies who have had experience in this field report that their results have been most satisfactory, it seems probable that additional information upon the subject will result in more favorable treatment at the hands of the progressive companies. It is to be hoped therefor that the statistical departments of some of the life insurance companies can be induced to re-open this subject and find some way of making a careful study of the mortality of the blind.
Below is a list of companies who have reported that they will insure persons without sight. When space would permit, we have used, so far as possible, the language of the Nedical Director of the company replying to our questionnaire. It should be said that the companies who accept blind persons without rating them up in one way or another are not very certain of their ground and are not seeking such business, and usually decline to insure blind persons except directly through their own agents.
COMPANIES WHICH DO NOT CHARGE EXTRA PREMIUMS
Columbian National Life Ins. Co., Boston, Mass. Restricts amount issued to $3,000
or less, generally on forms better than Ordinary Life, such as 20-payment Life
or an Endowment maturing around age 55.
Manhattan Life Ins. Co., New York City. Does not often insure blind persons. Has
issued a few short Endowments where conditions surrounding applicant and his
business activities seem to warrant such action.
Metropolitan Life Ins. Co., New York City. Issues certain plans of insurance after
investigating the cause of blindness and applicant’s ability to take care of himself.
New England Mutual Life Ins. Co. For several years has issued insurance on 20-payment Life or higher premium plans in amounts not exceeding $5,000. Every case has been given closest scrutiny, and those approved have been those who were employed in a strictly non-hazardous occupation or profession and who in all other respects were acceptable risks in accordance with its usual practice. Such business as is accepted is restricted to that submitted by its own representatives.
Provident Mutual Life Ins. Co., Philadelphia, Pa. Has granted insurance only on
some conservative Endowment plan in limited amounts. Accepts few applicants,
usually those blind since childhood, who have become adjusted to the handicap
and who are engaged in some self-supporting occupation.
Western and Southern Life Ins. Co., Cincinnati, O. Limits insurance to $500 on
Endowment plan.
AMERICAN COMPANIES CHARGING EXTRA PREMIUMS
American Central Life Ins. Co., Indianapolis, Ind. Additional premium according to
special schedule, “Table B.”
American Life Ins. Co., Detroit, Mich. Additional premium of $5 per thousand on
Life Plan, or $2.50 per thousand on 20-year Endowment and high premium plans.
Atlantic Life Ins. Co., Richmond, Va. Additional premium of $5 per thousand on
all plans where premium is less than that for 20-year Endowment, or $3 per
thousand for 20-year Endowment or for other plan when premium is higher than
for 20-year Endowment.
Capitol Life Ins. Co. of Colorado, Denver, Colo. Additional premium of from $2.50
to $10 per thousand, depending upon circumstances in the individual case.
Colonial Life Ins. Co., Jersey City, N. J. Does not accept blind persons in Ordinary
Department, but in Industrial Department issues policies for two-thirds benefit.
Columbus Mutual Life Ins. Co., Columbus, Ohio. Additional premium of $2.50 to
$10 per thousand, according to plan of insurance, and also depending upon cause
of blindness and the development of the other faculties of the applicant. Carefully considers each case.
Connecticut General Life Ins. Co., Hartford, Conn. Additional premium of $5 per
thousand.
Continental Life Ins. Co., Wilmington, Del. Accepts with sub-standard rating either
“Class A” rate or “Class B” rate, which are based upon an expected mortality of
140 per cent, or 165 per cent, of normal, respectively.
Equitable Life Assur. Socy. of U. S., New York. Additional premium of $5 per thousand.
Farmers and Bankers Life Ins. Co., Wichita, Kan. Additional premium of $10 flat.
Very few cases, accepting only those whose surroundings and mode of living are
most favorable.
Federal Life Ins. Co., Chicago, 111. Additional premium of from $5 to $10 per thousand on Ordinary Life policies, or extra charge of from $2.50 to $5 per thousand
for 20-year Endowment.
Fidelity Mutual Life Ins. Co., Philadelphia, Pa. Charges an additional premium and
issues only Endowment form of policy for a limited amount. Very few cases
accepted, and these only when applicant is surrounded by exceptional environmental conditions.
Franklin Life Ins. Co., Springfield, IL. Charges $5 flat per thousand. Accepts only
applicants “above average in intelligence and environmental conditions.”
Illinois Life Ins. Co., Chicago. Issues only 20-year Endowment or better to blind
applicants, with $2.50 extra premium per thousand.
International Life Ins. Co., St. Louis, Mo. Issues only 20-year Endowment or better
to blind applicants, with $2.50 extra premium per thousand.
Inter-Southern Life Ins. Co., Louisville, Ky. Charges extra premium of $2.50 to $10
per thousand, according to plan of policy, and depending also upon cause of
blindness and development of applicant’s other faculties.
Lincoln National Life Ins. Co., Fort Wayne, Ind. Charges $5 additional premiums on
Life plans of insurance, or $2.50 additional on Endowment plans per thousand of insurance.
Merchants Life Ins. Co., Des Moines, Iowa. Charges additional premium based on
expected increase in mortality rate of from 50 per cent, to 75 per cent.
Mutual Trust Life Ins. Co., Chicago. Issues insurance, usually on Endowment plan,
in small towns or country districts, with extra premium of $5 per thousand. In
larger cities this company has not accepted any blind persons. The rating depends largely upon the applicant’s occupation, character, and ability to care for himself.
New York Life Ins. Co., New York. Charges additional premium of $2.50 per
thousand.
North American Life Ins. Co., Chicago. Issues standard insurance to blind applicants with attendants; insures certain others on a sub-standard basis with a slight rating, depending upon occupation.
Northwestern National Life Ins. Co., Minneapolis. Charges additional premium of
$5 per thousand on Life forms and $3 per thousand on Endowment forms.
Peoria Life Ins. Co., Peoria, IL. Usually charges an additional premium of $5 per
thousand of insurance.
Phoenix Mutual Life Ins. Co., Hartford, Conn. Charges an additional premium of
$5 per thousand.
Postal Life Ins. Co., New York. Charges additional premium of $5 per thousand
when insuring applicant under 45 years of age or $8 extra per thousand when
applicant is over 45 years of age.
Prudential Ins. Co., Newark, N. J. Industrial branch insures blind applicants over
ten years of age with increase of seven years in premium rate; Ordinary branch
insures those in financial condition which lessens hazard through favorable environment, with a special premium rate calculated on the basis of a mortality rate 50 per cent, to 100 per cent, greater than the normal.
Reserve Loan Life Insurance Co., Indianapolis, Ind. Issues all forms of policies except Term Insurance to blind, with extra charge of $5 per thousand annually.
Southland Life Ins. Co., Dallas, Tex. Charges additional premium of $5 per thousand annually on Life forms with premiums less than 20-year Endowment, or
$3 for 20-year Endowment or better premium.
Union Central Life Ins. Co., Cincinnati, O. Issues various forms of insurance, charging premiums according to special schedule or rates, based upon expectation of
increase of 75 per cent, in mortality rate.
Volunteer State Life Ins. Co., Chattanooga, Tenn. Charges extra premium of $5 per
thousand annually. Does not grant cheapest forms of insurance, such as Special
Whole Life, Term or Preferred Risk.
West Coast Life Ins. Co., San Francisco. Cal. Charges flat additional premium of
$5 per thousand annually.
Western States Life Ins. Co., San Francisco, Cal. Blindness of both eyes usually
disqualifies with this company. Would consider exceptional case of active business man who has an attendant, charging additional premium of from $5 to $10 per thousand.
Western Union Life, Spokane, Wash, Accepts certain select blind persons, with extra premium of $5 per thousand.
Peggy Chong is the winner of the 2023 Jacob Bolotin Award from the National Federation of the Blind.
To contact The Blind History Lady, email; theblindhistorylady@gmail.com
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