the ridgerunner • Wednesday, february 23, 1972
Life Insurance for The College Man?
t
Not On Your Life, Advises C. U.
Unless a college student has
children, as a rule he should not
buy life insurance. In fact, says
the nonprofit Consumers Union,
“the last thing most college stu
dents need is life insurance.”
The exception would be the
breadwinner on whom children
will be dependent until they grow
up. Despite this atypical cir
cumstance for a collegian, CU says
“the life insurance agent has be
come a familiar figure on many
campuses.”
Bearing this out is an industry
survey of more than 300 life-
insurance companies which turned
up 20 per cent with sales programs
aimed at college students and
young professionals who are not
yet earning enough to pay the
premiums.
Isn’t it difficult to sell a policy
to someone who can’t afford it?
Insurance men have their sales
pitch so programmed to this hurdle
that they can often turn it into a
selling point. Says Consumers
Union, they approach the premium
paying problem by offering to
finance the first annual premium,
and frequently the second, with
a loan to be paid off perhaps five
years later.
The interest on that five year
loan? It’s payable at an annual
rate of 6 to 8 per cent or more.
And, says CU, in many plans the
policyholder pays interest on the
interest, too.
As an example of what life-
insurance loans can cost, the non
profit consumer organization tells
of a $10,000 policy sold by Fide
lity Union Life of Dallas in 1970.
The 21-year-old student purchaser
paid an annual interest rate of
8.5 per cent. The compounded
finance charge on the first year
premium loan of $151 comes to
$76.07.
From the creditor’s standpoint,
such loans are among the safest
imaginable, says Consumers
Union. Its full report on the sale
of life insurance to students,
contained in the January issue of
■ Consumer Reports, explains why
the lender’s risk is so minimal.
One element involves a minia
ture endowment policy built right
into the insurance policy. At the
end of five years, the insurance
company gets most of the cash
value in payment of the policy
holder’s debt.
INSURANCE
“On the other hand, if you should
get clobbered, say, in a demonstration, we don’t pay off.
We consider that an act of God.”
The promissory note itself has
built into it an acceleration clause,
a typical feature of retail install
ment contracts. If the student
fails to pay any premiums on time,
the lender can demand immediate
payment of the entire loan. With
the promissory note, he can also
readily obtain a court judgment
ordering payment.
Entitled “Caveat Emptor on
Campus,” the CU report, warns
that as with most retail credit
agreements, an insurance policy
financing note may be impossible
to cancel. Life insurance is cus
tomarily sold for a year at a time.
When a student is persuaded to
buy a policy and sign a financing
agreement, he is committing him
self to buy a full yeaf’s protection.
None of the policies or promis
sory notes examined by Con
sumers Union had a provision for
refund of premiums during the
first year. And, says CU, the poli
cies examined tended to be rela
tively expensive cash value polic
ies with lots of extra-priced
features.
Companies doing a big busi
ness in college policies often set
up special agents in college towns.
They like to recruit, as salesmen
popular campus figures such as
fraternity leaders, recently grad
uated star athletes, former
coaches and even faculty members
and administrators.
One professor at Michigan State
University is cited as reporting
some students he interviewed
didn’t know they were, signing a
contract committing them to buy
insurance. Some thought they
were signing a medical form.
Others thought they were getting
the first year’s insurance free.
All were being sued by the same
insurance company.
Eugene, Ore. (CPS) — Although
some faculty members have de
scribed general faculty meetings
as “disruptive, resulting in in
jury and insult to ladies,” the
Faculty Senate of the University
of Oregon has voted to take no
action changing the conditions
under which the meetings are
held.
Speech professor Bower Aly,
who iritroduced the motion to
change the format of the meet
ings, said the faculty has an ob
ligation to maintain decorum in
their meetings. He cited instances
during controversial meetings,
attended by many students, when
faculty members have been spat
upon and the meetings “degen
erated.”
“Some of the bad actors are
not students on this campus, but
regardless this has to be remedied,”
Aly said.
memoranda
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SUCH0 GOOD FRIENDS
/“VSI OTTO PREAAINSER FILAA
' Starring
D\54NOINNON J14MESCOCO JENNIFER O’NEILL
(R)
“Suddenly It’s All Tomorrow”
NOW!
letters
be flogged until a sense of respect
can be instilled. Now take these
numbskulled blockheads some
where else to seat them—I shall
have nothing whatsoever to do
with such oafs!!”
After this verbal thrashing the
wrinkled and restless patrons were
more than willing to go elsewhere.
However, during the course of
the evening, I saw several of my
fellow-students, who were also
seated in the reserved section,
intimidated by the ushers. These
students were not as resolute nor
as firm as I was. I fail to under
stand why the common, vulgar.
bourgeois citizens of Asheville
should have the choice of seats in
a building owned by the students.
And as long as I am a student at
this institution, I shall not so
much as budge from the seat of
my choice.
— Wilber Oberforce
IMPERIAL
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ASHEVILLE, N. C.
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