Insurance: Credit-Card Premiums

Like most traveling businessmen, insurance agents consider credit cards all but indispensable. Lately, however, agents have been alarmed to find that one of the fastest growing credit-card items is insurance itself. Thirty card systems and charge-account issuers now sell and service simple policies from travel and accident to term life insurance. So far, more than a dozen insurance companies are writing the policies.

First to try the credit-card scheme on a large scale was Los Angeles' Beneficial Insurance Group, which teamed up with the Diners' Club in 1959. After a slow start, Beneficial's card-catered insurance business grew 40% last year; to date, the company has sold 170,000 policies worth $4 billion. Now offered through a dozen more credit issuers, the company's accident policies range from $6,000 to $198,000 at monthly premiums from $1 to $12.70.

Others have happily joined in. Standard Oil Co. (Indiana) sells auto and travel accident policies written by its own insurance subsidiary; Chicago's Carson Pirie Scott & Co. department store offers Concord Life $10,000 term life insurance to its charge-account customers. Though the card companies earn only a modest fee of 20¢ to 50¢ on each premium billed, they are eager to offer new services and thus keep otherwise dormant accounts active.

Fearing that their own traditional 15% commission might be undercut, the National Association of Life Underwriters, speaking through Vice President Carney Smith, protests that the card plan has already "eroded the agents' market tremendously." To keep the card game from spreading, agents' groups have threatened such credit-offering chains as Sheraton Hotels and the May Co. with boycotts. They have also pushed anti-credit-card insurance bills through the legislatures in New Hampshire and Florida.