
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, June 8, 1990                   TAG: 9006080215
SECTION: BUSINESS                    PAGE: B5   EDITION: METRO 
SOURCE: DEBORAH EVANS BUSINESS WRITER
DATELINE:                                 LENGTH: Short

REFORM URGED IN CREDIT LIFE INSURANCE

Credit life insurance is "the nation's worst insurance rip-off," with consumers being overcharged nearly $1 billion annually for coverage few really need, according to a report released this week by the National Insurance Consumer Organization and the Consumer Federation of America.

"Borrowers either don't know they have purchased the product, think it is required or are manipulated in other ways by sellers," said Stephen Beck, executive director of the Consumer Federation.

Most borrowers already are protected by other life-insurance policies or by other assets, and families with neither may have higher priorities than repaying the debt if the borrower dies, the report indicates.

The report urges state insurance departments to require insurers to increase to 75 percent the proportion of premium dollars paid out as benefits. Of the $2.1 billion collected nationwide in premiums in 1988, only 43 percent was paid out in claims.

Consumers in Southeastern states "are especially taken advantage of," the report claims.

Virginia was among the states with the lowest premium dollars paid in claims, at 34 percent. Alabama and Louisiana ranked lowest at 17 percent; Maine was highest at 56 percent.

by CNB