Marshall County Republican. (Plymouth, Ind.) 1856-1878, 1869-09-29
LIE INSURANCE BUSINESS
AND FAILURE.

lett CT ''itte lhSurHhce HAS DtCOue
one of great importance. and for
some time we have intended calling
their attention to the matter in such
way as to guard them against givip
full faith and credit to all that's said
and written in behalf of life insur-
ance companies. 1t is a common
saying, generally believed, that such
companies never fail. and the doubt
er is called upon to point to one
that has not fulfilled its every obi
CATION. The Ohio Mutual Life and
Trust Company is often cited, but
the defender answers by saying this
company was banking IS well as
an insurance company. The intelli-
gent agent fervently assevera.es that
legitimate life insurance companies
never fail, and then feelingly points
to the heirs of the insured who have
been benefited by a death, and the
payment Of the loss. These are
practical arguments we have no
ability or desire to overcome
Companies that wH fulfill every OBJ
legation, we make no complaint
against
It occurs to us that among the
thousand and one companies whose
agents are industriously soliciting
risks, there must be disatrons fail
ures-perhaps not to-day nor next
week, but sometime, not genera
ton distant!
An English life company, the
Royal Albert AssuranceCompany,"
whose successful career began over
thirty ore years ago, has just failed'
with liabilities of millions upon mil
lions of dollars, due, and to become
due to the heirs of policy holders,
not farthing Of which will ever be
paid This company was regarded
rs one of the strongest and most re
liable in England. A short time
before it's failure it was doing a
grand business, paying expenses OF
S265, 900 a year, including $4,000
Tor directors and auditors fees, and
more than that sum for agents
commissions. Its dividends were
frequent and handsome, one o. five
per cent. occurring short time be-
fore the company failed fer $780,
O0O,OOO. Its officers were in good
repute, and everybody had implicit
confidence in the Royal Albert"
How many of the millions of the
policy holders in the United States
know anything about the true con-
dition of their respective compa-
MES. or ever understand their work
ings? But few propose to pay as
much for life insurance as they ex-
pect their heirs to realize out oil
their companies, yet moments re-
fiction Will show that lie insurance
companies must receive from the in
sured more than they pay to the tn
sured. If they don't do this. they
cannot survive. The interest on in
vestments rarely ever pay more thar
The expenses Of the companies
While actively engaged in business
companies are in receipt of sums o
money from premiums, largely ii
excess of losses paid, but HheneyeI
they stop soliciting risks, issuing
policies-in other words, issuing Ii
abilities-their principal source o
income is cut off. The risks contin
ue as long as any OF the insured
live, and when one dies, the amour
of the policy must be paid out o
constantly and rapidly decreasing
assets. A life insurance compan
can live no longer than it continue
to actively solicit risks, unless il
investments prove more remuner:
tive than ordinary investments d.
AS the country grows Older, ord
nary investments will pay less tina
they do now. We venture the as
sertion that there is no life insul
ance company in the countr
that could stop taking risk
continue paying the usual Iii
idends, and pay all liabilities as the
become due. Every insured par
must die and the heirs Of all SUI
whose policies were kept good mu
be paid. "The ratio of expenses
income" Of several prominent COZ
lanies are as follows: % to 81,
to SO, Is to Al, q to 81, 81 to l6,
to II, Is to II, &C., DC. "The 7
ito of claims paid to income, Go
does not vary greatly from expe
ses to income. Some compani
Pc .heir agents unnecessarily lar
salaries, others pay heavy percel
are, occasionally as high-as 40 l
cent, on premiums, and all of thu
have 5 officers, and fat and well p;
offices. In our judgement, the NJ
generation viii know many life
surance companies as things of
past, that are now certain never
fall"