New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1871-02-03
LIFE INSURANCE.


THE ELEMENTS OF DANGER AND SAFETY
AGENTs--sTATISTfC5 or LIFE INsuhAnoh
COuPANIES-EXCEssIyE EXPENDITURE-THE
BANKRUPT COMPANIES.
II is always matter Of deep regret when
great principle receives blow az the ha'"7 VI
those who should have the greatest Interest IN nlahtn
ing It, Such untoward occurrences may thfO" von'
porary force into the sophstrcs Of malignant carpeIs
and cause even wcll-wishers to mOmentdTly "aFer III
their confidence. The practical advantages 10 DC Oh
taIned from life insurance are numerous great anu
patent stll. every now and then such osoio'u'7 vi
gigantic fraud acknowledgement, or corruption ~ III
surance offices are made public almost to frghien
men from making wise provision Tor theT "No'
and children not because they have lost f@th IN the
principle of Insurance. but because they do not KNOW
what Office may may not be Trustworthy ana solvent
To this class OF insurers the danger from these disasters
IA but passing But there Is = large class OF poor
or mproyident men to whose laihl4leS
life insurance is an absolute necessity
the greater the burden TO the insurer the greater the
need OF insurance. To persons The kind Of THRIFT
which life insurance demands is one which they haVo
always prcssinemptatiOn to neglect; arising from the
natural inclination 20 avoid purely voluntary payments
OF money, from which there is no Immediate or personal
prospect Of return. Again. such men hesitiie before
committing themselves TO the payment Of an annual sum-
which they ind difficult to meet in the c0mmencemont
and fear TO find impossible meet in the future when
u0n-paymcn may risk whatever has been thus invested
II ia needless to point ont how Immensely the force OF
these motives increased BY every fresh disaster among
ineurance oi,es. Men VINO ind t impossible TO resist
the uuanswerabe arguments in favor OF life insurance
viii reuse themselves for the neglect OF so obvious
dny ON the plea that ihcr premiums will only go into
the pockets OF dishonest officials and their policies not
De worth the paper they printed on
The result ANY ching like general adoption of euch
ideas would produce far greater and more Eldepreau
disasters than the dishonesty ~ dozen bankrupt Offices
.t... tto n zfsf f. I'd lest
from tho failure Of any Offices TO pay its policies twenty
would De left in state OF dc,titut.On by those VINO hdi
refused or NEGLECTED. 10 insure their lives The absolute
soundness OF lie insurance as principle Is mathr1hu
eally demonsrabe but It's Success % business uAuer
taking and its usefulness to the community arc 'ol'y
dependent upon moral Laws. Let then, tne laws d. en-
forced to compel IN the conduct OF life insurance s'od
moral, and strict honesty aDd such disastrous exposures
as the Great western aud tine Farmers and Mechanics
Life Insurance Companies have lately furnished VIII De
come impossible, To this emo it IL necessary ior DOM
insurers and stockholders 20 exercise such careful super
vision Of their own interests as shall prevent 'heiF
directors from assuming Liabilities beyond the fair and
ordinary risks. 800
Though varying somewhat in their details in diner
emit Offices i. may De- said that there are bat two
4 stlEctlye forms Of life nsuGance-tho Lfe ana
the Endowment systems. There are, however Two
other forms which known in the state OF
NeW-York-the Popular and COOpeidtlYe-Dut OF thc
first OF these there IL only one tAtmPiIHO"'"'i'
and the second IS utterly wrong in principle and general
w dishonest In practice. simple life insurance is q
guarantee on the part of company 10 pay spec'heu
sum to representatives Of the insured IN the event o.
his or her death condition that specified premium Is
annually paid BIZ the insured during his or her lifetime
An endowment insurance is guarantee to paya spo-
fed sum 70 the insured at specified period-at 8, 10, i
or % Years after the date of insurance. or to the repre-
eptafvcs of the insured such time his or her death
NAV occur during that period The rates for TIE latter
form of Insurance are necessarily higher IN order to
cquaizc concentrate within the given tine the amount
which should be paid the regular life policy according
to the average expectation OF lfe There are stocA
mutual and mixed cOnpaniesthe mixed companies con-
stiturng the great majority, and being partly stock and
partly mutual in their operations The stock companies
reserve their profits exclusively for their stockholders
and profess to furnish insurance at accordingly lower
| premiums. The mixed companies reserve q fraction
usually eighth to quartcr-of their profits for
their stockhoder and divide the rest with their policy
holders The strictly mutual insurance companies divide
all their profits with polcy-holdcrs The division Of
profits with policy hoder Is made by the reduction OF
his ANIMAL premium or by the increase OF the sum for
which his life Is insured, by the payment Of cash diyi-
! dends These companies 5aso issue what is called a
"paidup policy that lis, by the payment OF sum
down either IN one premium or in a fixed number Of
premiums. the payment Of a stipulated is insured
either on death at period mutually agreed upon.
The system of popular insurance is somewhat peculiar
IN its principles In considering proposed insurance,
its aGhcrent do not pay much attention to the pre-
dcatcd tables Of life and the of the proposed insurer
~ his hcathuess and physique, and the longevity Of
his ancestry There but office in EcwYork state
conducted this principle matter for serious con
sicrati0n Is the form OF insurance known a. cooper
alive" Under this system, every person connected with
the institution has to contribute 81 the death Of any
one Of the members On the face Of it such method
OF insurance is dangerous there Is accumulation Of
af Of
may find themselves the only surviving members Of the
association What is technically known the life ex-
pectation az % years OF agethc time when most men
begin to think Of inSuIiEg their lives s according to tie
Carlisle table OF mortality, 80 years. Suppong all OF
class OF 5000 to be OF this age 139 deaths would occur
yearly and it would cost each member S12 premium for
his policy of 5000. II all Of the 5000 were 20 years
Of age their life expectation would be "a years the an
deaths M and of course upon the cooperative prin
cipe, the premium Sl This il far larger sum than
workngmen TO whom these delusive schemes are gen
more than any good life insurance company would
charge for similar rsas one OF the best and most sub
stantal companies IN the country Issues policies Tor
$500 at % years Of for an annual premium OF sos
and this premium entities the insurer TO participation
in the profits OF the complnys business. \ similar
policy at 30 years OF age carries a premium
Of Sill 20 II II he asked how can stock OF mutual com
phncS take RISK AT less rates tah the ueah average
would apparently call for, the answer Is that the pro
miums the policies Immediately invested ami set
to earning Interest which interest IN turn earns inter
est. The dollar cooperative companies voluntarily
deprive themselves or TINS Use ny only Gaining
for the premium contribution ~ II IL needed thus cut
ting themselves of from the great channel by means Of
which ordinary companies are enabled % fulfill their
engagements. The dollar companies do certainly charge
s. initiation fee and 10 cents annually for eXpenses but
these sums entirely insufficient They have also
peculiarly ruinous feature. In their prospectus it is
deliberately stated that there need be fear OF being
troubled by the examination OF physician! 1t ia Cv
dent that this makes the risk OF the company and the
healthy premium PAYERS still greater. The scheme OF
these companies Is preposterousy shallow, and full Of
danger TO all interested except unhealthy surcr) that
II is surprising that respectable names should have
been connected with it.
10 seems somewhat strange In considering arrange