The weekly north Iowa times. [volume] (McGregor, Iowa) 1857-1867, 1866-07-11
Insurance.

Insurance.
Life Insurance has of late years become
a necessity of modern society. Before
steam engines, cotton and wool factories,
iron roads and horses, moving machines
and the many other victories of mind over
matter, the arts for livelihood were far diff
ferently distributed. Nearly all then were
more or less producers, which productions
were of such nature that not much of it
could be buried with the posscssor, but
was left to nourish heirs. But since. tho
more general diffusion of knowledge and
machinery has multiplied, the men whose
minds are solely their estates and re,Y pro-
ductire ones too, the bread of the fathcrless
is too often buried with the father. And it
is not the laborer's crust that is taken SO
suddenly from the child's mouth, but the
railroad switch, pointing a few degrees in
the wrong direction, may not only extin-
guish constellation of the lights Of socic-
ty, but precipitatc score of families from
afllucncc to restitution. Life Insurance
possesses exclusively the power of creating
at once an adequate provision against such
contingencies, hence its usefulness. Where
mind or the exercise of art is a mans sole
estate, HIliNcldt Inventions nluSC come 10
the rescue of dependents.
The discussion of these points was not
the original intention of these lines, but to
enlighten the public somewhat upon the
course pursued by some of these compa-
MES who arc doing SO much good. The
sharp competition between companies Of
ten leads to exaggerations and receptions
which in time will prove highly injurious
to those companies employing them. The
great question and that which is the most
often asked, is what company pays the
largest dividends? Here let me quote
from the 10th Annual Report Of the
Massachusetts Insurance commissioners
for 1865.
DIVIDENDS.
There seems to be a constant effort on
the part of many companies to make per-
sons believe that they are sure to get half
their premiums back again in the shape of
dividends. Their advertisements often
unqualifcdly boast Of and promise divi-
dends of fifty per cent On the premium
paid. If such thing had really been
done by them, many Of these companies
would now be hopelessly insolvent. They
arc Fortunately quite otherwise. What has
really been done, is this: fifty per cent of a
premium paid three four or five years ago
is returned to the policy holder who had
persisted in paying his annual premium to
those who, i'll the meantime, discontinued
nothing. Fifty per cent payable in four
years assuming legal interest is not quite
40 per cent. and when it comes to be paid
is only about forty per cent. of only about
two thirds the premium received in the
year to which it pertains. That is, it is
1906 per cent. op the premium paid
Undoubtedly with premiums calculated on
an assumption of interest ut four per cent.
and 33 per cent. added for expenses and
contingencies. AS much as 80 per cent. of
all the premiums received may be returned
while the mortality is light, the expenses
reasonable, and six or seven per cent is
realized on investments. And more than
that may be returned to some members ii
others are defraudcd. But why not state
the fact as it is? Why bring about both
public and individual misapprehension by
ignoring time which is money in this case?
And sinking out of sight as those who lose
their dividends by disseminating.
But how are some members defrauded
IN Tie dirision Of surplus, most ttagrantly.
For example: Understand that four per
cent is the basis of interest assumed by the
company. All realized over that goes into
the surplus.)
There is company having policies en-
tered in 1874 as well as every year since,
which is bound by it's charter to divide its
surplus equally between its members
Two policies entered at the age of ~, one
in 1874, the other in 1864 pays the same
premium-s3l, so on $1,000. Ofthis, S23,-
6S is the net which goes into the premium
reserve. OF the remainder, suppose each
contributes S4.72I or fifteen per cent. for
expenses at the end of the year, if the
rate on mortality is no more than calcutta
ted upon, and six per cent realized out OF
investments there will be on hand aneNcess
Of premium of each policy of S3,O93=
S6,lo. Two per cent. on the value of the
other policy, 81 ,i5. Two per cen on the
ynlue OF the newer policy OBS. IA
Total Invisible surplus Sl3,93.
This is shared equally by the two mem
bers. each getting s6, 964. But in equity
SloAl belonged to the older policy and
$685. to the newer one Ii the divisions
Of surplus on this plan is made only at
periods longer than year, the departure
from equity is still greater. Upon this
point Elizur Wright says: Assuming the
strictcst equity, the cheapest insurance,
consistent with substantial certainty,
minimum of the gambling element viii be
most attractive when the subject is under
stood. We cannot but greatly commend
and congratulate those companies which
have adopted the method of dividing sur
plus according to the contributions of the
several policies to form it. This is the
practice of all those companies who make
a virtue of 30 per cent. dividend.
With this view Of the dicidend question
we will leave tho reader to chose for HIM
self between those companies who mete
out equity or eqaatity to its policy holders
If they chose the former, they will not
fail to instrc in the North Western Mutual
Life Insurance Company Of Aiilwaukcc.--
This company silcnces any objection of
this kind by preserving the strictest equity
between its members. Its promptncss
| needs no recommendation, but only an APP
peal to your memory There is not in the
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