Life at a Premium

Harlemites Discover Decades of Insurance Redlining

The discrimination against minority policyholders is most easily seen in so-called "industrial policies," whose premiums were often paid on a weekly or monthly basis. Industrial policies seemed cheap to low-income consumers, with frequent payments that were often under a dollar. In most cases, though, the policies would ultimately pay out much less than they cost—especially when minorities screwed up the insurance industry's actuarial tables by living long, healthy lives. "Basically, the industrial policies were a way to prey on poor people," says Timothy Blood.

The suit against Unity Mutual claims the company also trained its agents to develop relationships with customers to sell "burial protection," manipulating the emotions of customers "by instilling in, or playing to, a sense of shame in leaving their loved ones without funds to pay for a funeral at the time of their death." Unity's Masella responds by saying that life insurance provides everyone, not just the poor, "with a dignified way to bury loved ones."

But Blood concedes that by industry standards, Unity Mutual has been cooperative in the investigation into its discriminatory practices. A source at Unity claims that company executives once discussed paying back Naomi Kelly's overcharged premiums, but because of a "miscommunication" with the lawyers bringing the lawsuit, they never followed through.

Lilly and Naomi Kelly, victims of policy overcharging
photo: Jay Muhlin
Lilly and Naomi Kelly, victims of policy overcharging

Naomi Kelly's policy will in all probability (and by Unity Mutual's own admission) pay her only a few hundred dollars more than she paid for it. When asked what she will do with her extra cash, Lilly begs her mom not to say she'd take it to Atlantic City; besides, she reminds, it's the principle of the thing.

Naomi Kelly smiles, saying, "Back when I bought it, anything was a lot of money. But now, a couple of hundred dollars, it's not really much, is it?"

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