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- Title
A History of Racial Exploitation in Life Insurance.
- Authors
Agesa, Jacqueline; Agesa, Richard; Berry, Woodrow
- Abstract
During the period of slavery in America, slaves were regarded as an insurable risk. This is evident by the large number of southern insurance companies willing to write life insurance policies to cover slaves as well as the high volume of slave policies written during this time. From the period following the Civil War until as recent as the 1980s, insurers peddled industrial policies--substandard policies with inflated premiums and limited policy face value--in the black community, while offering mostly standard policies with actuarially fair premiums to white consumers. Recent work examines racial differences in the demand for life insurance and finds that black and white consumers are equally likely to purchase life insurance. However, blacks insure a disproportionately smaller fraction of their human capital. The current analysis scrutinizes these results in the historical context. Specifically, we argue that blacks' mistrust of insurers that developed as a result of historical racial exploitation likely plays a role in explaining their propensity to under-insure.
- Subjects
UNITED States; RACE discrimination; INSURANCE companies; NONINSURABLE risks; CONSUMERS; SLAVERY in the United States; CIVIL war; RACIAL differences
- Publication
Conflict Resolution & Negotiation Journal, 2011, Issue 3, p1
- ISSN
1946-0236
- Publication type
Article