New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1872-12-10
THE MEANING 0F THE "HUTI4L LEES
REDUCTION or RITES.
To ms Editor OF me Tribune.
SIR In Yonr naner of this datc "

SIR In your paper Of this date you a1y
Il NE aune. g .ssa morn ;e.Ry 5s,5 ~ - 70, H. , Tr
aT n this WAT Of ae'a.. 70 rsole ID
unqualaei sstsaeoq Il mans ihe To- 10 , n
nush n re -uhuc q 90 I' ilst 9a' e. . re
har Of b chance be bettef tegl ~cs u aefe ster
natives rgpro.gat, ,h fis. Is Of tls sl,e,i aoaaut
In . mutual lfo Insurance company The di7itent ro-
turned IS tho df renee between the premium charged
for the insurance ana the real cost Or H. No matter
what rate is charged, the number o. deaths wih
occur the fund mustsJe added % ne COM
panys assets and the OF interest viii ne real
tied on investments Neither the OF mortality nor
interest the accumuAriOns nor Office expen3e'
affected by tho reduction IN rates proposed D5
the Mutual Life OF York" Il would really lessen
the cost Of insurance 10 reduce the commission pan
| agents for securing tho business. but u. wiz
ston has not yet .maie pubic hs ultimate purpose ~
cutting down commissions a1d dispensing WIN the er-
vices Of the agents energy. ability and Industry
have IN the long years I1t are s0l educated the e0
pie appreciate the b5nedcent scheme OF LIE insIr-
ance and built up the great Company over which he
presdes with 80 ite appreciation " tho who have
carried theipraiss OF himself and his CJmplay al ov2r
land. BY influence ami persul1iO1 a. ieaIL ID
per cent OF tue COmp4nys membership las boon So
cured, Og cher with the proxies b. which the present
management kept in power. l. Il not possible 70
centrasa tho business and profits OF This Company into
the hands OF is two executive Officers and O1rteen
general agents, Az well might the great mercantile
and manufacturing interests OF thIs metropolis attempt
dispense with the Of the alesnen solicitors,
and agents, whose gongs up AMI down the length ana
breadth OF fe land have built monuments ot c~mmer-
cial greatness before equ.le1 in any aga or
country Withdrawing statesmen and solicitors IN mer
camille transactions bankruptcy IA, the case OF
the Mutual Lie o. New-YOrl change Ot mar
agemeut,
Then the agents comm ssOns, the rate Of mortality,
the accumuatjns the rate " interest and the
Office expenses remaining the same the cost to policy
holders reduced by reducing tho rates Of initial
premiuns In fact, the plan Of Withholding dividends
20 full premium win increase the cash
outlay for Il is not very daleult To- prove
this statement notwithstanding the fal4cious exhibits
published over the signatures Of the President ana
Actuary Of the Company.
Let Us see what tA3 new plan IS:
1rae1 from Le. totler s5as3 oy The Pr'ss'' ant
y, ar, 81, 4ss@ry qat -. ~ T. - ., r,, Of Rates sor
new loaeI'aos IA t's a." .e X f 20 o@ M h. 70
per Uron Whole Life Policies the elect to rele The premiums
1Fr,-la Iom VA H. C. Brr,r, >,-- u, ig7ll
The OH nuos ba 81 on .osr nI or money and
tS 9r 4 enrs In the o-Teye Of aoa iof ordinary
pn. The elIy dvdlals uIsTtls as" syia @ 81 eo1e De
Ti Tia, re r,anr7 credits 9. sss tyeeeis he ivc9 as
present cash the policy anniversary 4 amealt . more oan
able pay ile premiums tn 20 tae' -, .,-,- ....
its 1 ooao arg fund . s i T. A. i' y
ing GA hand a large uHdiyidsi surpaa"
Now you see It, and now you d9n'sI This vtzn is 90
enable the Company 70 "c0ntrOa large surpsas fnnd.
and az the same time "ayOd keeping on hand largo
undivided surplus This actuarial maneuyer Is 70 ena-
bio some one TO "bot and keep the cIAo, = feat
which has heretofore abandoned By every expert
IN legerdemain.
Tuis IA too serious matter 20 ntnoe words about
TIE special peadings and iaoes contained iwthe pub
locations OF the Company thus r are unDeeoung 10 the
acknowledged mathematical abilities OF tho aged aFta-
arr whose reputation Is as word-Sido thn of the
United States Military Academy nc West Point. while
the withholding Of the diyldonds tins rednesdrates
IL complimentary 20 the daan3ll conservatism aad in
dtF OF ged President, whose tlr5eoins ysoa th1s
anticipates the trouble" which viii certainly oyertaLa
the Company when than half It's membership shall
consist Of b0se who have passed beyond the scrptara8
ase OF three-scOre years and ten.
This plan OF reducing the races and ut the samo tire
withholding dividends TO the amount OF one annual pre-
MUM IL Ike the practice cailei hedging" afnOng
gamblers and stock Understanding bets both sides
as precautionary against loss. IL IL simply an
offer THAI the Mutual Life Insurance Company Of
Eew-YOrk oaa this business margin for adverse
coutingences7 30 per cent than any NJ Itaa Com
paly the world has dared venture 10 do It, And
the really wicked thing about it is that the who
no propose 60 take these bets VIII have molerc7l IN
their graves for years before any extraordinary roud
shall be needed TO pay the increased rate OF mortality
among largo membership OF old men, which ra1o OF
Increase exactly correspond to the low rate expert
enccd o5 a timo when nearly all tie mcmbcr5 ot-she
Company wore young men IN the prime Of Ito AID
health.
Zen years ago this Company had only l2cD memha-sI
roy 6 has about 10 Oo0 having added nearly 60O0 mem
bers mostly young the last 10 years. So that
although the Company the oldest in this country, the
proportion Of its young membership does not differ ma
teriay from recently organized Institutions
Hence the Company must have the control OF Large
fund.- accumulated by Withholding dtvldonds on las
low rates to increased rate OF mortality caused
| by q prepoaderaaee OF aged members or prevailing
epdemics OF eso the premium lOadIngs for adverse
must heretofore, and tho old
rates tie old dividends. and the old plans OF INSURANCE
/ CONTINUE.
cosr OF INSURANCE on OH AND NEW PLANS
/ Eases for comparison:
FIRST: Reduction or old rate 81 and 4-i0th per ceDt
seo0rd. Dividends rates 10 % withheld 70 mo
amount OF annual PREMIUM the excess only asaA-
/ bls In reduction of premiums.
Third: Actual payments made IN 1870, when AL pre-
| ylous di Vidend had been used AS cash
E0ilrh Ton thousand dollars life pulley lsSaed a. age
s5.
/ COST ON OLD PLAN,
1 dividend avail Casa
| Preriu Annually Ogtay.
\ f....... 3l5J 80 s263 20
a 263 30 2a7 90 los 81
!