The Hawaiian gazette., 1869-12-22
Lie ln.nrnncc-Is it safe !

/ 14lAA
personal interest to many of onr readers, that
we arr sure they will peruse With satisfaction
the following very just and intelligent remarks
upon the subjdct from n late New York paper,
setting forth the principles upon which the
Companies are organized, their value to the
community, ard their almost absolute safety
as an investment.
Several of our city papers have lately taken
up the subject Of Life Insurance, as one de-
manding a new and more Thorough invcstiga-
ton. They do not attack the principle or the
system, but only the management of some Of
our most popular companies. Such criticism,
though severe, is not always unfriendly, and
if INDUCED in by those who are acquainted
with the principles of the science, the manage
ment of the several corporations, and the -ex-
tent of their Governmental supervision will
do good. Public institutions must expect TO
be the object of public inquiry So long rs
Life Insurance was a small affair, its light
might be hid under n bushel- But it has in
creased to such magnitude within few years.
and new companies are springing up SO fast in
every State and City in the Union, that it is
time to ask whereunto it will grow. Already
the amount of money it absorbs is such as
The last year there was paid for Life Insurance
in the United States sixty millions Of dollars
the greater part of which came out Of poor
men, or at least men in moderate circum stan
ces who rely upon this as a chief dependence
for their families. They have right to ask
how companies are managed to which they
commit their hard-earned savings, perhaps
their little all.
We feel a personal interest in this discus
sion, because we have no small stake in the
matter We are ourselves insured in several
companies, and it is because We have SO much
ut stake that we seek knowledge. If these
companies are not safe. then we are not safe.
The money that we have put in them is lost.
Therefore, for our own sakes, while we depre.
cate rash and hasty censure, we welcome hon
est and intelligent criticism. We are enlight-
ened by it, and see better how to protect our
own interests. Besides, we feel that we owe
it to our readers to give this subject special
consideration. We have frequently expressed
our confidence in the leading Life Insurance
Companies, and no doubt hundreds of our rea-
ders have been led by our commentator, to
insure themselves. 1t is therefore with US q
matter of conscience and of good faith to give
4 reason for our approval of the system, for
the satisfaction Of those who may have respect
for our candor and Judgment
The investigation SO far has not shaken our
faith a particle, nor would it, though dozen
papers should join to pour hot shot into the
system of Life Insurance. Let them fire away
as much as they will. If it is founded on
rock, it will stand all their canonading if it
is not, if the walls of this strong fortress totter
at the first discharge, then it ought to fall,
and the wreck be cleared away before others
put their trust in it to their ruin.
But we repeat, the sharpest criticism does
not disturb US, because we do not regard Life
Insurance as a matter of like or dislike, but of
pure mathematical calculation. The whole bu-
siness comprises but two elements, the ratio OF
mortality and he natural increase Of money.
Take man in middle life, say forty or forty
five, years old, in good health, and nothing is
more uncertain than the time of his death.
But take hundred or thousand such men
and it is as nearly certain as any future event
can be, that about such a proportion say
three or four per cent. will die in year.
The exact proportion has been fixed by sta
tistics of mortality kept for two hundred years.
1t is therefore perfectly easy to compute, out
of certain number Of persons insured, how
many losses q company will have to pay. The
next thing is to provide the money. For this
every company doing business in this State is
required by law to have q paid up capital of
500 900 to start with. This is deposited with
touched. Then every premium paid goes to
swell the resources at command. These, be-
ing invested in the best securities, where they
earn interest all the while, roll up very fast
The mere accumulations from year to year
will soon make a large capital. In any prr-
dent company this will be allowed to aecumu-
late till it is a long way ahead of any probable
calls, with ample margin for all contingent
cies. Can anything be safer than this? If a
company has a fixed capital which is kept in
tact, and an amount of assets of undoubted
value, which at a low rate of interest would
be far more than sufficient, with the incoming
premiums, to pay all losses as they mature,
from year to year, that company may be con-
sidered reasonably safe. We think it is as
secure as human prudence and foresight can
make anything.
1t is therefore with good conscience, and an
earnest desire to promote the real benefit Of
our readers, whom We regard as only a large
community of .'frends and neighbors," that
we recommend to every head of family to
get his life insured, regarding it as the cheap
est provision which he can possibly make for
those whom his death would leave otherwise
destitute.
We are sometimes asked our opinion as to
the best investment of money, by friends who,
having but little, wish to put that little in
something that is absolHtsly safe. Our answer
to all such is, that there is nothing absolutely
safe but the kingdom of heaven. Put money
in houses and lands? The houses may burn
up, the land may be sunk by an earthquake.
or from hundred causes may be rendered un-
productive and almost valueless. Bank stock
is thought to be very good, but banks some
times break to the ruin Of those who trust in
them. Mortgages may prove but poor secu-
rty. Government bonds are counted the best
of all, yet there are men, even in the United