Term paper

Of
Banking and insurance

Submitted by: Submitted to:

Shahvez Khan Ms.Anushital Sinha
10810526
1805 –A22
B.B.A-M.B.A
 Acknowledgement

Firstly I will thanks to god who is

always with me at every turn of
my life.
I will thanks to my teacher
Ms.Anushital Sinha, who helped
me in completion of my term
paper.
I also want to thanks my friends
who discussed with me on my
topic
Also want to thank deeply to the
vijayaraghwan who is author of
banking and insurance.
Finally I will thanks to my
parents, guardian for their
Continue support.

The History Of Life Insurance

Risk protection has been a primary goal of humans and institutions

throughout history. Protecting against risk is what insurance is all about.
Over 5000 years ago, in China, insurance was seen as a preventative
measure against piracy on the sea. Piracy, in fact, was so prevalent, that as
a way of spreading the risk, a number of ships would carry a portion of
another ship's cargo so that if one ship was captured, the entire shipment
would not be lost.
In another part of the world, nearly 4,500 years ago, in the ancient land of
Babylonia, traders used to bear risk of the caravan trade by giving loans that
had to be later repaid with interest when the goods arrived safely. In 2100
BC, the Code of Hammurabi granted legal status to the practice. It
formalized concepts of “bottomry” referring to vessel bottoms and
“respondentia” referring to cargo. These provided the underpinning for
marine insurance contracts. Such contracts contained three elements: a loan
on the vessel, cargo, or freight; an interest rate; and a surcharge to cover
the possibility of loss. In effect, ship owners were the insured and lenders
were the underwriters.
Life insurance came about a little later in ancient Rome, where burial clubs
were formed to cover the funeral expenses of its members, as well as help
survivors monetarily. With Rome's fall, around 450 A.D., most of the
concepts of insurance were abandoned, but aspects of it did continue
through the Middle Ages, particularly with merchant and artisan guilds.
These provided forms of member insurance covering risks like fire, flood,
theft, disability, death, and even imprisonment.
During the feudal period, early forms of insurance ebbed with the decline of
travel and long-distance trade. But during the 14th to 16th centuries,
transportation, commerce, and insurance would again reemerge.
Insurance in India can be traced back to the Vedas. For instance,
yogakshema, the name of Life Insurance Corporation of India's corporate
headquarters, is derived from the Rig Veda. The term suggests that a form of
"community insurance" was prevalent around 1000 BC and practiced by the
Aryans.
And similar to ancient Rome, burial societies were formed in the Buddhist
period to help families build houses, and to protect widows and children.

Modern Insurance
Illegal almost everywhere else in Europe, life insurance in England was
vigorously promoted in the three decades following the Glorious Revolution
of 1688. The type of insurance we see today owes it's roots to 17th century
England. Lloyd's of London, or as they were known then, Lloyd's Coffee
House, was the location where merchants, ship owners and underwriters met
to discuss and transact business deals.
While serving as a means of risk-avoidance, life insurance also appealed
strongly to the gambling instincts of England's burgeoning middle class.
Gambling was so rampant, in fact, that when newspapers published names
of prominent people who were seriously ill, bets were placed at Lloyd’s on
their anticipated dates of death. Reacting against such practices, 79
merchant underwriters broke away in 1769 and two years later formed a
“New Lloyd’s Coffee House” that became known as the “real Lloyd’s.”
Making wagers on people's deaths ceased in 1774 when parliament forbade
the practice.

Insurance moves to America

The U.S. insurance industry was built on the British model. The year 1735
saw the birth of the first insurance company in the American colonies in
Charleston, SC. The Presbyterian Synod of Philadelphia in 1759, sponsored
the first life insurance corporation in America for the benefit of ministers and
their dependents. And the first life insurance policy for the general public in
the United States was issued, in Philadelphia, on May 22, 1761.
But it wasn't until 80 years later (after 1840), that life insurance really took
off in a big way. The key to it's success was reducing the opposition from
religious groups.
In 1835, the infamous New York fire drew people's attention to the need to
provide for sudden and large losses. Two years later, Massachusetts became
the first state to require companies by law to maintain such reserves. The
great Chicago fire of 1871 further emphasized how fires can cause huge
losses in densely populated modern cities. The practice of reinsurance,
wherein the risks are spread among several companies, was devised
specifically for such situations.
With the creation of the automobile, public liability insurance, which first
made its appearance in the 1880s, gained importance and acceptance.
More advancements were made to insurance during the process of
industrialization. In 1897, the British government passed the Workmen's
Compensation Act, which made it mandatory for a company to insure its
employees against industrial accidents.
During the 19th century, many societies were founded to insure the life and
health of their members, while fraternal orders provided low-cost, members-
only insurance. Even today, such fraternal orders continue to provide
insurance coverage to members as do most labor organizations. Many
employers sponsor group insurance policies for their employees, providing
not just life insurance, but sickness and accident benefits and old-age
pensions. Employees contribute a certain percentage of the premium for
these policies.

Final Thoughts
Even though the American insurance industry was greatly influenced by
Britain, the US market developed somewhat differently from that of the
United Kingdom. Contributing to that was America's size, land diversity and
the overwhelming desire to be independent. As America moved from a
colonial outpost to an independent force, from a farming country to an
industrial nation, the insurance business developed from a small number of
companies to a large industry.
Insurance became more sophisticated, offering new types of coverage and
diversified services for an increasingly complex country.

Insurance in india:

In the year 1999 under the impact of globalization the Indian Laws allowed
the entry of Private players in the Life Insurance industry. While this ended
the monopoly of LIC in the Life Insurance business, this was heralded as a
revolutionary decision. Whereas this has not been so. It is only that the
wheel has taken a full circle.

Types of life insurance plans:

Term Insurance Policy

This policy is pure risk cover with the insured amount will be paid only if the
policy hold dies in the period of policy time. The intention of this policy is to
protect the policy holder’s family incase of death. For example, a person who
takes term policy of Rs.500000 for 20 years, if he dies before 20 years then
his family will get the insured amount. If he survive after 20 years then he
will not get any amount from the insurance company. It is the reason why
term policies are very low cost. So, this type of policy is not suitable for
savings or investment.
Whole Life Policy

As the name itself says, the policy holder has to pay the premium for whole
life till his death. This policy doesn’t address any other needs of the policy
holder. because of these reasons this kind of policy is not very popular or
insurance company not suggesting to take this policy.

Endowment Policy

It is the most popular Life Insurance Plans amoung other types of policies.
This polciy combines risk cover with the savings and investment. If the policy
holder dies during the policy time, he will get the assured amount. Even if he
survives he will receive the assured amount. The advantage of this policy is
if the policy holder survives after the completion of policy trnure, he receives
assured amount plus additional benefits like Bonus,etc. from the insurance
company. In this kind of policy, policy holder receices huge amout while
completing the tenure.

In addition to the basic policy, insurers offer various benefits such as double
endowment and marriage/ education endowment plans. The cost of such a
policy is slightly higher but worth its value.

Money Back Policy

Money Back Policy is to provide money on the occasions when the policy
holder needs for his personal life. The occassions may be marriage,
education,etc. Money will be paid back to the policy holder with the specified
duration. If the polciy holder dies before the policy term, the sum assured
will be given to his family. A portion of the sum assured is payable at regular
intervals. On survival the remainder of the sum assured is payable

When Life Insurance business was nationalized in 1956, there were

245 private companies and PF societies which were transacting the
business. Why did the Government take this action? Your guess is as good
as mine.The business of Insurance company is to bring together people
sharing the same risk, collecting their share of contribution (premium) to the
common risk and compensate those who suffer from a risks (death) or
maturity of term (survival benefit). In order words the insurance business has
higher component of the modern day term of “corporate social
responsibility” and lesser component towards “profit”.
As of now there are 16 new life insurance companies of which only SBI Life
Insurance is making profit. Rest of them despite of heavy media glitz are yet
to break even !!!
A Life Insurance policy creates a financial asset which can be
purchased in installments. However this has got a unique facility under
which in case of death, the outstanding installments need not be paid by the
legal heirs.
Life Insurance Policy is a movable, marketable and liquid asset. It can be
transferred or mortgaged. Loans can be taken against a policy.If an
insurance company is making money, then it must be ripping you off, right?
Well, not really. Insurance companies have to make money. That's why they
are in business. Remember, the point of insurance is to cover a major loss.
You hope you never have to use it. Also, many insurance companies don't
make their profits off of your premium, but investments.
Insurance companies collect premiums from hundreds of thousands of
customers. They then pay out benefits to those customers you make claims.
If they collect more premium than they make payments, then they make
what is called an underwriting profit. Some insurance companies manage an
underwriting profit, some don't. Many insurance companies make their profit
on what is called the float. This means that they invest the premiums they
collect. Since, with some types of insurance, premiums are typically collected
many years before they have to pay out benefits, the insurance company
can have ample time to make significant investment returns on the premium
money. If the insurance company is good at investing, this can be where
they make the majority of their profit.

Some of the examples of life insurance company:

Insurance companies simply play the odds and base their rates upon that.
For example: the odds of getting in a total loss accident are roughly 1 in 240.
That means for every one accident, there are 240 people paying insurance
premiums to cover that one accident, and those insurance premiums are
invested for a return. They also factor in the odds of a person cancelling their
policy without ever making a claim against it. In cases like life insurance, the
company collects insurance premiums from people for decades and invests
the money for a higher return that what the pay out will be when the person
dies (IE: If a 20 year old buys $100,000, the insurance company is taking in
$40 a month for the next 50-70 years in some cases...that adds up quick
when you figure the returns...the client still only pays $20,000 or so total, so
the return on investment is great for them and it's profitable for the
insurance company as well...especially for companies that sell term
insurance where sometimes people pay into it for decades then it expires or
client cancels it becuase it get so expensive and they ge tno money back
and the insurance company doesn't end up paying out anything at all...clear
profit on those ones. Policy = the insurance contract basically Claims = you
file the paper work for an eligible occurance that should result in a payout
(IE: If you have auto insurance and you get in an accidient, a 'claim' is when
you send in the paperwork for get money from your insurance...you are
basically "claiming" that the insurance company owes you money)
Insurance companies make money by investing premium dollars before
those premiums are needed to pay claims. Customers pay monthly or semi-
annual premiums. Insurance company invests premiums in the stock market
or other investments. By the time customer files a claim, the insurance
company has made a large profit off their investment. This is based on the
fact that the AVERAGE customer doesn't file a claim right away.
As you know every vehicle should be insured before they can hit the road.
the basic principal behind insurance is to divide few claims between so many
other participants. even though the damage of your father's vehicle was a
big amount insurance co. collect huge amounts as premium. and not every
car owner is going to claim insurance every year. How many vehicles do you
think are out there ? and how many vehicles crash? Insurance companies
also invest the premium they collect in various markets and they gain profits
from those investments. maybe one of the most profitable businesses on this
planet. you know, life is the only insurable item that has a definite danger.
Death. Insurance co has to pay life insurance benefits whether the assuared
is dead or alive.
! Here's a brief description on how it works: The insurance company asks it's
customers many questions when signing them up. This helps the insurance
company place them in a group with other similar drivers. The insurance
company knows that within that group of people a certain percentage are
likely to have an accident. They also have an idea of how much that will cost
them. The larger the group, the more accurate their estimates are. So they
charge everyone in the group enough to cover for the estimated costs of the
accidents. Insurance companies are also regulated by the states, so if they
made too much profit (usually anything above 12% of annual premium) than
the state will make them charge less the following year or make them send
out refund checks. That keeps them from charging whatever they want.
An insurance company is required to put millions of dollars "in reserve" to
pay future claims, before they can sell policies. These reserves are invested -
primarily in guaranteed bonds and money markets - very, very safe. They
make their profits, off of the interest income from their investments. That's
how they can afford to, for example, pay out $1.17 in claims, for every $1
they take in, in auto insurance premiums. When the market tanks, the
premiums go up, because the investment income isn't there any more, to
subsidize the claims. Or not there so much. A policy, is a contract between
the insurance company and the insured. A claim, is a demand from the
insured, for the insurance company to pay.
Automobile insurance companies -- and most insurance companies are in
business to make a profit. For example, let's say that an insurance company
brings in a total amount of car premium payments of a million dollars -
$1,000,000. That would happen if 1,000 households paid $1,000 each for a
year - or $500 for each of 2 cars the household owns. Then, let's say that the
drivers have accidents and the insurance company has to pay out $250,000
in claims for accidents that year -- that still leaves them with $750,000. In
fact most big insurance companies have premiums in the hundreds of
millions or even billions of dollars and they don't just insure cars, but homes
and businesses also. They would pay some of that towards running their
business such as wages and expenses, but they would also make a hefty
profit. And, of course, they charge more and insure hundreds of thousands of
drivers each year. And, that example doesn't even touch on the fact that
they will be investing most of the money that they have coming in. They
need to have a certain amount of "capital" available for payments but the
remainder can be invested. Many insurance companies buy insurance to
cover themselves if they run into a situation with a more losses than they
had counted on. The insurance that insurance companies buy for themselves
is called "reinsurance." This way they carry less risks to their own company
because someone else will help them out if they need more money to pay
claims. You know how some of your friends' parents may pay much more for
car insurance than other people do --- and some people pay a lot less? That
is because each insurance company hires people called "underwriters." They
look at all kinds of factors to figure out who is most likely to get in a car
crash and who is less likely to get into a crash. If there are teenagers in the
family that will usually cost more. If the teens are on honor role and took a
safe drivers course, they may charge less. If the drivers in the family have
speeding tickets or other moving violations that they've gotten tickets for -
the insurance company will charge them more or not insure them at all. If
the driver is married and has a record of no accidents for a period of years,
and own their own home, they will tend to be charged much less than drivers
who don't. Even the type of car that you drive -- and the color -- can cause
you to be charged more money because statistics used by the underwriters
show that more of those models of cars get in accidents or get stolen!
Although it may seem as though they paid a lot for your Dad's accident,
think about how many years he's been paying insurance premiums. If he's
been paying $900 a year for 20 years, he's paid the insurance company
$18,000. If he paid $1,200 a year for 20 years, he's paid the insurance
company $24,000. Take 10 neighbors all paying $1,200 a year for 20 years -
and the insurance company had $240,000 in premiums-- or close to a
quarter of a million dollars just from those 10 neighbors! Take 40 neighbors
on a street paying that same amount and that totals close to $1,000,000 - a
Million Dollars paid to the insurance companies just from that neighborhood
on that one street. How much do you think that they paid out in claims and
how much was profit? It might be worthwhile and helpful to you in the future
to ask your Dad just how much insurance costs him. Ask him also about what
he has included -- will they fix the car if it slides off the road on ice into a tree
if no other cars are involved? What if there is another car and your Dad's not
at fault? Does he have a high "deductible" where he pays the first $1,000 of
his own car's repair bill? Ask these questions and if he's willing to share the
answers, you'll be getting pretty smart about insurance and in a much better
position for when you go out on your own! Plus, you can educate your friends
about it! Insurance is a VERY profitable business. They try to make sure that
they will continue to raise their rates and/or remove drivers who are more
likely to have claims such as accidents or stolen cars which will cost them
money to be sure that they make a very lucrative profit!
Insurance companies themselves pay nothing: insured persons do: You must
have a huge amount of people paying for insurance coverage (home car
etc..) and seldom if ever having to make a claim, and that money (a good
part of it will go to pay to those who have had fires or theft or accidents etc).
That's also why insurance companies are reluctant to pay sometimes,
because of fraudulent claims etc. So. as with any other company, if it pay out
too much, it goes belly up. So they use tons of statistics and probabilities
(what's the probability that "X" number of men who take life insurance will
die of this or that by the time they're 50 or 60 ...)
Insurance companies make their profit by charging insurance policy
premiums. You have to understand that insurance companies have access to
numerical statistics. They know how much money it will cost for health care
money to cover x people between the ages of 30 and 40. They know how
many dollars in auto accident repairs they will need to spend over so many
months, etc. There are statistical variations to this of course, but in general
they know. So from this data, they can develop a premium to charge all
customers in the "risk pool", and that is how they generally make their
profits.

The institution of Insurance Ombudsman was created by a Government of

India Notification dated 11th November, 1998 with the purpose of quick
disposal of the grievances of the insured customers and to mitigate their
problems involved in redressal of those grievances. This institution is of great
importance and relevance for the protection of interests of policy holders
and also in building their confidence in the system. The institution has
helped to generate and sustain the faith and confidence amongst the
consumers and insurers.
Appointment of Insurance Ombudsman:
The governing body of insurance council issues orders of appointment of the
insurance Ombudsman on the recommendations of the committee
comprising of Chairman, IRDA, Chairman, LIC, Chairman, GIC and a
representative of the Central Government. Insurance council comprises of
members of the Life Insurance council and general insurance council formed
under Section 40 C of the Insurance Act, 1938. The governing body of
insurance council consists of representatives of insurance companies.

Eligibility
Ombudsman are drawn from Insurance Industry, Civil Services and Judicial
Services.

Terms of office
An insurance Ombudsman is appointed for a term of three years or till the
incumbent attains the age of sixty five years, whichever is earlier. Re-
appointment is not permitted..

Territorial jurisdiction of Ombudsman

he governing body has appointed twelve Ombudsman across the country

allotting them different geographical areas as their areas of jurisdiction. The
Ombudsman may hold sitting at various places within their area of
jurisdiction in order to expedite disposal of complaints. The offices of the
twelve insurance Ombudsmans are located at (1) Bhopal, (2) Bhubaneswar,
(3) Cochin, (4) Guwahati, (5) Chandigarh, (6) New Delhi, (7) Chennai, (8)
Kolkata, (9) Ahmedabad, (10) Lucknow, (11) Mumbai, (12) Hyderabad. The
areas of jurisdiction of each Ombudsman has been mentioned in the list of
Ombudsman.

Office Management

The Ombudsman has a secretarial staff provided to him by the insurance

council to assist him in discharging his duties. The total expenses on
Ombudsman and his staff are incurred by the insurance companies who are
members of the insurance council in such proportion as may be decided by
the governing body.

Removal from office

An Ombudsman may be removed from service for gross misconduct

committed by him during his term of office. The governing body may appoint
such person as it thinks fit to conduct enquiry in relation to misconduct of
the Ombudsman. All enquiries on misconduct will be sent to Insurance
Regulatory and Development Authority which may take a decision as to the
proposed action to be taken against the Ombudsman. On recommendations
of the IRDA, the Governing Body may terminate his services, in case he is
found guilty.

Power of Ombudsman

Insurance Ombudsman has two types of functions to perform (1) conciliation,

(2) Award making. The insurance Ombudsman is empowered to receive and
consider complaints in respect of personal lines of insurance from any person
who has any grievance against an insurer. The complaint may relate to any
grievance against the insurer i.e. (a) any partial or total repudiation of claims
by the insurance companies, (b) dispute with regard to premium paid or
payable in terms of the policy, (c) dispute on the legal construction of the
policy wordings in case such dispute relates to claims; (d) delay in
settlement of claims and (e) non-issuance of any insurance document to
customers after receipt of premium.

Ombudsman's powers are restricted to insurance contracts of value not

exceeding Rs. 20 lakhs. The insurance companies are required to honour the
awards passed by an Insurance Ombudsman within three months.

Manner of lodging complaint

The complaint by an aggrieved person has to be in writing, and addressed to

the insurance Ombudsman of the jurisdiction under which the office of the
insurer falls. The complaint can also be lodged through the legal heirs of the
insured. Before lodging a complaint:

i) the complainant should have made a representation to the insurer named

in the complaint and the insurer either should have rejected the complaint or
the complainant have not received any reply within a period of one month
after the concerned insurer has received his complaint or he is not satisfied
with the reply of the insurer.
ii) The complaint is not made later than one year after the insurer had
replied.
iii) The same complaint on the subject should not be pending with before any
court, consumer forum or arbitrator.

Recommendations of the Ombudsman

When a complaint is settled through the mediation of the Ombudsman, he

shall make the recommendations which he thinks fair in the circumstances of
the case. Such a recommendation shall be made not later than one month
and copies of the same sent to complainant and the insurance company
concerned. If the complainant accepts recommendations, he will send a
communication in writing within 15 days of the date of receipt accepting the
settlement.

Award

The ombudsman shall pass an award within a period of three months from
the receipt of the complaint. The awards are binding upon the insurance
companies.

If the policy holder is not satisfied with the award of the Ombudsman he can
approach other venues like Consumer Forums and Courts of law for redressal
of his grievances.

As per the policy-holder's protection regulations, every insurer shall inform

the policy holder along with the policy document in respect of the insurance
Ombudsman in whose jurisdiction his office falls for the purpose of
grievances redressal arising if any subsequently.

Steady increase in number of complaints received by various Ombudsman

shows that the policy-holders are reposing their confidence in the institution
of Insurance Ombudsman.

Guidelines for Purchasing Life Insurance

• Calculate the amount of life insurance coverage you and your family
would truly need in the event a tragedy occurs. What would be
required in order for your dependents to maintain a reasonable
standard of living?

• Buy low-load insurance policies which pay minimal up front

commissions to an agent as this will help minimize your overall
insurance expenses and keep the ratio of commissions to premiums as
low as possible. Work with an independent insurance agent who does
not work for only one insurance carrier, you’ll want an agent who
represents many different companies as this will help assure you the
least expensive, highest quality policy available. Also take advantage
 of any online resources to assist you in your shopping and price
comparisons and be sure to check insurance company ratings as you
want to ultimately buy your policy from a solid highly rated company.

• Buy a policy of insurance that covers only the period of time during
which you are exposed to risk. For a period of 30 years or less, term
life insurance is likely your best, most cost-effective coverage option.

• When unsure of the time frame you require for coverage, it may be
wise to purchase a policy with a conversion option that would allow
you to convert from a standard term policy to a policy of whole life. Be
aware that the trade off involved in having the conversion option is of
course a higher cost.

• Create and customize your own whole life policy by purchasing a policy
of term life and using the savings or spread in your premiums to invest
in an IRA or to pay off any high interest debt you’ve accumulated.

• Only use whole and universal life as a tax-sheltered investment vehicle

if you have exhausted all other sources of tax-advantaged savings (i.e.
IRA’s, 401(k) and the like).

• Before purchasing whole or universal life compare the associated

investment options of the policy to all other tax-sheltered investment
vehicles to determine which options will truly help you meet your long
range objectives

Insurance Companies Profit from Smoking

It was my general understanding that insurance companies charged its

customers a premium for insurance policies which they in turn reinvested to
cover the eventual payouts. Insurance companies earn investment profits on
“float” or collected in insurance premiums that has not been paid out in
claims. Insurers start investing insurance premiums as soon as they are
collected and continue to earn interest on them until claims are paid out.

Profit = earned premium + investment income - incurred loss - underwriting

expenses.
The more efficiently they did that, the more money they made.
Apparently, they have not done that very well and now expect somebody to
bail them out of their bad investments. As we learned in 2007 and '08, the
big insurance companies had invested in the derivatives market and lost
$Trillions. As a result of AIG's inability to support its many Credit Default
Swap commitments, American taxpayers were called upon to provide $180
billion to bail them out of their financial mess.
Seeing an opportunity to capitalize on the hyped-up public hysteria about
smoking and recognizing the "deep pockets" of the tobacco industry, the
insurance industry has chosen to target the tobacco industry and cigarette
smokers to further line their pockets with ill-gotten profits.
Consider Blue Cross and Blue Shield of Minnesota who sued cigarette makers
to recover $1.77 billion they say they spent to treat smoking-related
illnesses. What in the world were they supposed to do with that $1.77 billion?
That's supposedly the business they're in ... taking your money to pay for
your health costs.

So much for their policy holders revenues to cover their profits ... these are
some greedy folks. Not only did they get money for the original insurance
policy, but they got paid again for fulfilling their obligations to cover the
health costs of their clients! Not bad.

And, apparently, it wasn't only health care costs the insurance companies
needed to recoup. Feeling pretty proud about their deception of the
American public and their burgeoning windfall of stealing more of your
money, they rewarded themselves pretty well with salary increases that
exceed the total income of many of their victims.

Median annual earnings of full-time wage and salaried

underwriters rose to $48,550 in 2004, up from about $30,800 in
1994. The middle 50 percent increased their earnings to between
$37,490 and $65,450 a year, up from between $22,000 and
$40,500 10 years ago. The lowest 10 percent almost doubled
their income from $18,600 to $30,410; the top 10 percent
increased to more than $86,110 a year, up from $54,800.

In March 2009, it was publicly disclosed that the American

International Group (AIG) was to pay approximately $218 million
in bonus payments to employees of its financial services division.

As politicians and Americans across the nation are debating health care
reform and nationalized health care, their conversations are about the wrong issues.
Instead of debating public options or doctor choice, what they really should
be talking about is how long the criminals in the insurance and banking
industries should be spending in jail for their fraud and theft of the American
taxpayer.

I repeat my original premise: "The current anti-smoking campaign is not

about your health ... It is all about YOUR MONEY... They want it!

Insurance Hypocrisy

When was the last time you saw a smoker swerving

down the road, running over pedestrians, or crossing the
center lane hitting another car head-on?

So, why do smokers often pay more for automobile

insurance?

Does the insurance agents ask you if you drink liquor? Of

course not, but they do often ask whether you're a
smoker. Now, who's more likely to cause an automobile
accident ... someone on his 10th cigarette or someone on
his 10th highball? Cigarettes were not cited as a
contributor to the 120 mph auto crash that killed Diana,
Princess of Wales, and her two companions. But, the driver was found to be
drunk.

Hardly a week passes without newspaper reports of accidents, shootings,

and robberies related to alcohol-use, but do they make an issue or charge
you extra if you drink?
"We have a situation in the United States where we're spending $15 billion
on the war on drugs, and yet we allow billions of dollars to be freely spent to
promote the drug (alcohol) that kills more than any other drug."

What's replacing the banned tobacco ads? Alcohol and drugs! As if we don't
have enough drunk drivers on the roads already, more and more people are
being encouraged to drink through an increase of liquor advertising. No
double standard here!

In another move to heighten the hypocrisy of the anti-smoking movement,

as of Jan. 1, 1998, California has banned smoking from even within, of all
places, Bars. Oh, it's okay to get drunk before getting out on the streets and
highways, but God forbid that you should smoke a cigarette while getting
inebriated. What an act of foolishness!
 • The median age at which children begin drinking is just over 13 years
old.
• 26% of eighth graders, 40% of tenth graders, and 50% of twelfth
graders report having used alcohol in the past month.
• 18% of eighth graders, 38% of tenth graders, and 52% of twelfth
graders report having been drunk at least once in the last year.
• One-quarter of sixth graders say it is "fairly easy" or "very easy" to get
beer. 15% say it is easy to get liquor. A study conducted in
Washington, D.C., revealed that 19- and 20-year-old males were able
to purchase a six-pack of beer in 97 out of 100 attempts.
• Among ninth grade students, alcohol or other drug use, or a
combination of substances, was the best predictor of early sexual
activity. For youth, alcohol use more than any other single factor is
indirectly responsible for more pregnancies, sexually transmitted
diseases, and HIV infections.
• Many of the radio stations on which Seagram airs gin ads feature
youth-oriented rock and roll or album-oriented rock formats that target
audiences officially designated 18 and above. In reality, many younger
teens listen to those stations.

It should be clear to anyone who can read (those who can't already don't
believe them) that these anti-smoking "do-gooders" really don't care one
whit about you, your children, or your health. They do care about your
money, however. So much so that they will do anything and say anything to
convince you to give more of it to them.

Consider the success they have already had in recent years in convincing
you to give them more of your money.

Personal Consumption Expenditures (billons of dollars)

Source: Bureau of Economic Analysis, U.S. Dept. of Commerce
198 199 199 199 199 199 1995
9 0 1 2 3 4
Tobacco 40.5 43.4 43.8 49.6 47.0 47.7 47.2
Products
Drug 55.0 60.6 70.9 75.0 77.9 81.7 85.7
preparatio
ns
Physicians 121. 133. 152. 167. 172. 179. 189.
6 8 1 2 9 8 8
Hospitals 209. 231. 293. 320. 344. 363. 383.
& Nursing 5 3 4 0 4 8 6
Care
Health 31.2 36.6 37.3 42.7 51.7 57.0 61.3
Insurance
Tobacco products show an increase of only 16.5% of Americans spending
between 1989 and 1995 compared with an increase of 56% for drug
preparations and physicians, 83% increase for hospitals & nursing care, and
a whopping 96% increase for health insurance.

According to a survey by Modern Healthcare

magazine, half of all hospital CEO's earned
$165,500 or more in 1995.

I ask you, "Who's getting your money?"

Motivation for Deception

Take a look at the following data comparing revenues of the insurance and
tobacco industries between 1989 and 1995. You'll notice the revenues of the
leading insurance companies have been drastically reduced while the
revenues in the tobacco industry have increased.

Insurance Revenues (millions of dollars)

1989 1995
Prudential Insurance of 129,118 41,330
America
Metropolitan Life 98,740 27,977
Insurance
New York Life Ins. 37,302 16,202
Aetna Life & Casualty 52,023 12,978

Tobacco Revenues (millions of dollars)

1989 1995
Phillip Morris 39,069 53,139
R.J. Reynolds 15,224 16,008
American Brands 7,265 5,905
Universal 2,920 3,281
UST 670 1,300
Source: The World Almanac and Book of Facts,
1997

Do you see any clue here as to what industry might have a reason to assault
another industry? I would suggest the insurance industry has a high
motivation to disparage the tobacco industry, and they have gained the
support of government bureaucrats and many deceived Americans in
stealing your money.