There is an oft-played Public Service Announcement (PSA) that I hear on one of the rock music radio stations coming from Aberdeen. It features actor Chris Noth of Law & Order and Sex and the City fame. He tells listeners that his father died when he was young and one of the key factors that enabled him to attend college was that his father had purchased life insurance. So, Noth is working with the "nonprofit" organization LIFE to educate others about the critical role life insurance plays in helping families financially weather a sudden death.
On its face, this sounds like a very legitimate pitch. There is no question that life insurance can make a significant difference when the main breadwinner dies. I have personally benefited from it when my mother died of cancer all too early. So, I'm not disparaging the general idea.
However, if a person decided to do a bit of research, it turns out that this pitch isn't all it's cracked up to be. For one thing, I don't think a life insurance policy had anything to do with Noth being able to attend college. His mother, Jeanne Parr, was a pioneering foreign correspondent for CBS News (back in the day when news was NEWS) and the young Noth grew up in England, Yugoslavia and Spain. I'm not suggesting that CBS correspondents became millionaires, but they were handsomely paid.
The other very interesting facet of this PSA is the identity of the so-called nonprofit organization. It turns out that LIFE stands for the Life and Health Insurance Foundation for Education and its member organizations are insurance corporations, the very enterprises that will realize egregious profits if they can convince you of the critical need to purchase insurance!!
As with most things in this country, in the past two or three decades, Corporate America has figured out how to take great advantage of laws and policies that were set up for more noble purposes. The idea behind nonprofit status is that of a corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive.
In a very technical sense, LIFE meets the statutory requirement. The Board and its officers do not benefit from the money that comes in to the foundation itself. In a real life sense, however, the Board, officers and member organizations DO benefit directly from the organization's efforts because LIFE's primary function is to get individuals and families to purchase insurance from the member organizations!! And they do this to drive up their own profits!!!
Of course, most of this information is lost on the majority of the people who hear this PSA. All they know is that Mike Logan/Mr. Big became a TV star and life insurance played an important role. If Chris Noth vouches for LIFE, maybe I should too...NOT.
On its face, this sounds like a very legitimate pitch. There is no question that life insurance can make a significant difference when the main breadwinner dies. I have personally benefited from it when my mother died of cancer all too early. So, I'm not disparaging the general idea.
However, if a person decided to do a bit of research, it turns out that this pitch isn't all it's cracked up to be. For one thing, I don't think a life insurance policy had anything to do with Noth being able to attend college. His mother, Jeanne Parr, was a pioneering foreign correspondent for CBS News (back in the day when news was NEWS) and the young Noth grew up in England, Yugoslavia and Spain. I'm not suggesting that CBS correspondents became millionaires, but they were handsomely paid.
The other very interesting facet of this PSA is the identity of the so-called nonprofit organization. It turns out that LIFE stands for the Life and Health Insurance Foundation for Education and its member organizations are insurance corporations, the very enterprises that will realize egregious profits if they can convince you of the critical need to purchase insurance!!
As with most things in this country, in the past two or three decades, Corporate America has figured out how to take great advantage of laws and policies that were set up for more noble purposes. The idea behind nonprofit status is that of a corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive.
In a very technical sense, LIFE meets the statutory requirement. The Board and its officers do not benefit from the money that comes in to the foundation itself. In a real life sense, however, the Board, officers and member organizations DO benefit directly from the organization's efforts because LIFE's primary function is to get individuals and families to purchase insurance from the member organizations!! And they do this to drive up their own profits!!!
Of course, most of this information is lost on the majority of the people who hear this PSA. All they know is that Mike Logan/Mr. Big became a TV star and life insurance played an important role. If Chris Noth vouches for LIFE, maybe I should too...NOT.
That they are backed by insurance companies isn't exactly a shocker. It doesn't seem as if anything illegal is afoot.
ReplyDeleteI didn't suggest there was anything patently illegal. My point was more that public interest groups promote policies that benefits the whole of society, while nonprofits like this one promote policies that benefit the member organizations far more than the anyone else.
ReplyDelete