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The committee of experts from private insurance companies appointed by Secretary McAdoo opposed optional insurance and favored "increasing the amount of compensation provided, by a grant on the part of the government of a stated amount of life insurance to every fighting man without any premium." (27) This alternative proposal was in effect a recommendation for a lump- sum compensation payment in addition to the monthly instalments already provided for; it was not insurance in any true sense of the term. Mr. Parker in the minority report of the House Committee centered his opposition upon the insurance feature and favored increasing the compensation. (28) Though some opposition developed upon the floor of the House, the insurance section was easily passed, only five representatives voting against it.

(28) House of Representatives, Sixty-fifth Congress, First Session, Report 130, Part 2, p. 9.

The bill provides that every person in service may apply to the Bureau without medical examination for from $1,000 to $10,000 insurance against death or total disability resulting from any causes either during or after the war. The insurance provided is thus general insurance and not exclusively war insurance. Only near relatives can be named as beneficiaries. (29) The United States bears, not only the extra mortality and disability cost resulting from the war, but the cost of administration also, so that the premiums are actually lower than the normal peace-time rates. During the war and for not more than five years afterward the insurance is to be so-called "term" insurance, holding for successive terms of one year with no surrender value. Premiums are to be paid monthly and deducted from the soldiers' and sailors' pay. The insured person is given the opportunity of converting the term insurance within five years after the war, without medical examination, into some policy issued by the Bureau. If he does not do so the insurance will automatically expire. The Bureau was also empowered by the act to designate the forms of insurance for which the term insurance could be exchanged, and to fix the premiums.

The Bureau of War Risk Insurance has stated that the term policies may be converted into the following forms: (a) whole- life, (b) payment life, (c) endowment, (d) other policies to be announced later. (30) Especially significant is the Bureau's statement that the premium cost upon the converted policies "will be a fixed premium without expense charge. This means that it will be cheaper than the now published rates of insurance companies because the government will not charge for running or overhead expenses." (31) The government is plainly committed, therefore, to continue to bear the cost of administration after the war.

(31) Ibid.; italics are mine.

A time limit of 120 days was fixed in which the men in service could apply for the insurance. During this time the government provided free and "automatic" insurance to the amount of approximately $4,300.

It had been thought at first that flat-rate premiums would be levied irrespective of age, but the Bureau instead graduated them according to years. The monthly cost for men of 21 is $0.65 for every $1,000 of insurance; for men of 31 it is $0. 70 for every $1,000; for men of 41, $0. 82 for every $1,000. (32)

The insurance is not to be paid in a lump sum, but in 240 monthly instalments. Table I shows the monthly income which various-sized policies will yield. Thus the widow of a man who had taken out the full amount of insurance allowable would receive $25.00 monthly compensation and $57.50 insurance, or a total of $82.50. A widow and one child would receive a monthly total of $92 .50, and a widow and two children $105 .00 monthly.

TABLE I

*Monthly instalments will be payable during the total and permanent disability of the insured even if the injured party lives longer than twenty years.