Investment Insurance

Among the mutual fund companies, the Investment Trust of Boston is small (assets: $8,600,000) and relatively little known. But it has a notable record. Founded in 1931 by President Ernest Henderson and Vice President Robert Lowell Moore of the Sheraton Corp. of America, Investment Trust of Boston put its capital into real estate and closed-end investment trust shares, then dirt cheap. In the last ten years, its shares have increased in value by 1,220%, more than those of any other U.S. investment trust. But little effort was made to sell its shares until recently. Now its trustees hope to make it one of the biggest mutual funds in the U.S. by pushing a new kind of sales plan: the first voluntary systematic investment program for buying mutual fund shares and group insurance in one package.

In order to put the plan in operation, the fund's trustees have to get approval for it in each state. The first state to give the trust clearance was Tennessee, sales started a few weeks ago. Last week it got approval in New York and Vermont. Once the technicalities are ironed out, the trustees hope to have an okay to operate in all 48 states.

Under the plan, an investor agrees to buy up to $10,000 worth of the trust's shares with monthly or quarterly installments over any period from ten months to ten years. (He can stop his program at any time, without penalty.) In addition to buying mutual fund shares (at net asset value plus an 8 1/2% commission), his installments pay the premiums on a term group life insurance policy, written by the John Hancock Mutual Life Insurance Co. and covering the unpaid balance of his investment program. A maximum 50-c- custodian and accounting fee is also deducted from each payment. Since the insurance is provided on a low-cost group basis, the premiums deducted from his monthly payments amount to only $9 per $ 1,000 coverage a year, little more than half the cost of regular term life insurance for a man of 45, and less than one-third the premium for a man of 55. For policies of $5,000 or less, no medical examination is required. If the policyholder dies before his investment program is completed, the proceeds from the life insurance are used to pay up his plan in full.

This file is automatically generated by a robot program, so reader's discretion is required.