THE LIFE INSURANCE GAME

In this latest exposÉ of the life insurance trade, Washington Post reporter Kessler covers much the same ground as ex-agent Walter S. Kenton in How Life Insurance Companies Rob You and What You Can Do About It (1983)--without matching Kessler for insight or counsel. At best, the charges are familiar ones: though low-cost term offers top value for most individuals, the industry trains agents to push high-priced permanent (whole-life) policies. For both underwriters and agents, the accent is on premium volume. Small wonder, then, that they tend to misrepresent, stressing the dubious cash value of chosen instruments, ignoring low real returns (just over 40 cents on the dollar), and giving consumers scant basis on which to comparison-shop. Kessler also inveighs against the industry's legislated freedom from federal oversight, which dates back to 1945; state authorities, he contends, have skimpy budgets and maintain suspiciously chummy relationships with the companies they're supposed to monitor. Scored as well are overly zealous investigative firms (like Equifax) that may pry into the personal lives of big-money applicants. Kessler's strictures, however, are not always logical. Thus, he observes that during a recent five-year period only a dozen of the nation's 2,100 underwriters went broke (versus 42 FDIC-insured banks in 1982 alone)--and then he implies that policy-holders may be at risk. There are a number of lengthy digressions, too--the mishandled probe of claims in a suspicious Florida case, an atypical loan by Equitable to a promotional energy venture--that read like recycled newspaper pieces. Both the reform-minded and the ordinary insurance-prospect will do better with Kenton or with Andrew Tobias' The Invisible Bankers (1981).