Editor’s Note: We continue to feature the voices of Blacks during this decisive time in our nation’s history. We are fortunate yet again to feature the voice of Ralph Mitchell. Ralph is a veteran, a Lt. Col. in the U.S. Army Reserves. He is CEO of his own financial investment company and lives in Massachusetts. He writes screenplays and loves history. You can connect with Ralph on LinkedIn & Facebook.
By Ralph Mitchell
To show you how deeply Institutional Racism has been ingrained within American Society, let’s look at Life Insurance. People buy Life Insurance policies not exactly for their own benefits; but mainly to benefit their family members whom they leave behind after they die. The Death Benefits typically are Tax Free and that money is used to pay off home mortgages, provide income support to widows, ensure that kids can afford to go to college, pay off business loans and a variety of other purposes. But just what happens when an insurance policy barely even covers the costs associated with a decent funeral?
Prior to the passage of Civil Rights Law in 1964 many states (especially Southern States) actually had state laws that made it illegal for people of color to be sold any Life Insurance that paid a Death Benefit of $500 or more. That was the law of the land and it has seldom ever been discussed or presented in movies or on TV. The one exception was a made for TV movie that starred Cicely Tyson called “Blessed Assurance” that came out in 1992 and has only rarely been seen since.
Before Black People were given any Civil Rights or “Legal Rights” the ONLY Life Insurance they were allowed to purchase were Industrial Life Policies or Burial Policies. Each week a White Insurance Agent would come into the Black (or Colored) neighborhoods to collect weekly payments. All payments were in cash and entered in a Payment Book hat resembled a booklet for a Passbook Savings Account at a bank. As money was received as payment, the Agent would enter the dollar amount along with his handwritten initials as proof. Then he would come back again the following week.
These policies had no Cash Value. No Surrender Value. No Grace Periods. Policy owners were under the illusion that if their policies lapsed they would become uninsurable and no insurance coverage of any kind would ever be available for them. What was never told to the policy owners was that over time they would eventually pay more money in terms of Premiums (payments) than what these policies would ever pay their next of kin after they died.
This was the main storyline in “Blessed Assurance”. In that movie Cicely Tyson forms a Mother-Son relationship with the young White man who was her local Agent or “Surance Man”. When he saw the fallacy of what was going on, he tried to persuade her and some of the others to simply save their money.
Back in 1974 when I was just 19 and in college, there was a white professor from Canada who was teaching finance at my small college. He asked those among us to bring in our Life Insurance contracts from him to look at. He promised that he would NOT hold them up in class and talk about them in from of everybody. He only wanted to see them because he was working on a book and wanted to see examples of American Life Insurance policies in comparison to Canadian Life Insurance. Since most of us were young and had no Life Insurance, he asked us to bring in a policy that was owned by one of our family elders. So I brought him the policy owned by my maternal Grandfather. A few days later that professor called me into his office to discuss it.
First of all, that policy was from a small unknown company that was headquartered in Georgia. The actual contract was about ten pages long and written in so much “legalese” that most lawyers would have had difficulty trying to determine what it really did and did not cover. That policy discussed Fire Insurance, Flood Insurance and just about every major hazard and peril imaginable. One would have thought that this was the one and only “end all” insurance policy that was ever needed. It was not until in the middle of Page 8 of 10 that it discussed the actual Death Benefit; and it was for only $300. My Grandfather had faithfully paid $3 each and every week for more than 15 years. Do some simple math and you will see that he paid at least $2,340 on a Life Insurance policy that would only have paid his widow (my Grandmother) just $300 after he died. Even a decent funeral back in the early 1970s would have cost at least $1,000. Had my Grandfather been a white man, he could have easily bought a more credible Life Insurance policy that provided a Death Benefit of $20,000 or more for the same amount of money as what he had already been spending.
Why? Because somebody within our state government wanted to be sure that a certain class of people always remained so poor and broke that they would have so few choices but to take on all of the back-breaking, dirty and greasy jobs that just paid pennies on the dollar that they did NOT want to see white people being forced to do. This being the law of the land was purely institutional racism.
When I tried to explain to my Grandfather exactly what that professor had explained to me, he went ballistic! He yelled and used “cuss words” that I had never ever heard him say before that day! Finally when my mother heard about this, she stepped in as the “peace maker” and asked me if I could make an appointment for her to meet with that same professor. I had no idea that she too had bought one of those policies. She was a School Teacher and rather than an Agent come by our house to collect the payments, she simply mailed in a check every month that covered an entire month in advance. After she came home from her meeting with the professor, she had the most totally disgusted look on her face that I had never seen before. She was so hurt and angry that she practically refused to speak to anybody at all for nearly three days. Finally the following month a young White woman that was an Insurance Agent for a nationally known insurance company came to our house and sold her a much more credible policy of Life Insurance.
Fast forward to 1994 and there was a full page ad within USA Today from a law firm in Chicago that described more than 50 smaller insurance companies that had been bought out by major carriers over the years. It was those smaller companies that originally had sold those Industrial Life policies prior to 1964 and although it was practically 30 years later, many of those outdated contracts still existed with people still paying and paying; the insurance companies looked upon those old contracts as “cash cows” and did nothing to try and make any amends. That law firm was organizing for a series of overdue Class Action lawsuits.
Back in those days women (regardless of race) could not have credit under their own names and even though it usually were the wives who signed the checks that paid the household bills each month, all credit applications ALWAYS asked about where the husband worked, This went on until the late 1970s.
Even though my Dad had been killed in 1964, my Mom tried to keep him alive on paper for several years. She used to read Army Times and if anybody who really did not know our family ever asked her where our Dad was, she would just make up what Army assignment he supposedly had overseas in Korea. Back in those days long distance telephone calls were so expensive that nobody ever bothered to try and make such an expensive telephone call just to verify his existence. As long as her bills were still getting paid on time, not much else mattered. That was how she got approved for her credit card at Sears Roebuck and later got financing for a new car. By then she was a school teacher, but the credit application still asked about her husband’s place of employment.
Meanwhile I saw neighbors over on another street sometime in 1966 get evicted when a Deputy Sheriff came by one Monday morning and nobody was at home. This particular house was being rented by a very young couple and they had been out of town for some reason. Just like that the words in that song by Sonny and Cher, “They say our love won’t pay the rent…” Well guess what? The lock on their front door was busted, a new lock was installed and a crew of men just hauled out everything that was inside of that house and left it all sitting out on the front lawn. When they finally came home a few days later, most of their belongings had “disappeared” during a few nights.
There was a truck that periodically came through at times from now defunct Dixie Finance Company. This company would lend money and allow people to pledge their household furniture as collateral. If they failed to pay on time, that truck along with a crew of men would come by to collect somebody’s household furniture and haul it away. One of my adult neighbors must have had some horrible credit. Instead of giving the finance company his home address, he instead gave the address of his elderly mother and of his sister; both of whom lived in my neighborhood. Well that truck came by one day looking for him and there was a whole lot of drama taking place out there until the police finally arrived to try and sort things out. I was walking home from school and several people were standing out near the street just looking and talking about what was going on. This must have been so embarrassing to that family that owed that money! I have no idea if things like this ever took place in any of the white neighborhoods back in the 1960s.
I knew that there had to be better ways than this of managing one’s own finances. Since finance was not being taught in public school, I had no other choice but to check out books on finance from the public library. As I grew into my teens while friends of mine were trying to sneak around with copies of Playboy, I was busy reading the Wall Street Journal. When I got into college, it was finance that became my major subject.
When I look back at what my grandfather went through just trying to buy Life Insurance and being denied by law from having access to anything more credible, it just goes to show that obviously other means of being able to create and accumulate wealth were most likely also being systematically denied to Black (colored) people prior to 1964.
Yet, people often wonder why there has been so much poverty within Black families for so many generations?
And many continue to deny that there is such a thing as “systemic racism.”