The New York herald., 1872-12-06
Laso Insurencc-The Proposed Reduc-
tiOn Of Rates.

Life Insurenee-The Proposed Resiuc-
tion Of Rates.
Almost simultaneously with our record of
the prudent determination of the Board Of
Fire Underwriters to raise their rates Of pre-
MUM it has been publicly announced that an
oid-established life insurance company, which
has hitherto been considered as most conser-
vative In its management, has determined to
reduce it's rates. This announcement has
startled the community all the more on ac-
count OF the solemn promise made by that
company about month ago, in published
account OF its remarkably prosperous career
from Its organization in 1912 to October /,
1879 This promise was thus worded: 1.-THE
company will continue to guido its business in
future by the same principles and rules which
a long experience has shown to be most con-
ducive to the safety and best interests of its
policy-holders. 1t win issue polices Of all ap-
proved descriptions and at its usual table
rates. But by CIRCULAR issued on the Both
ult., it seems already to have abandoned that
position. 1t now proposes to issue its policies
at q reduction from 'sits usual table rates." of
about twenty-five per cent upon life policies,
and eleven per cent upon endowment assur-
ances. The learned actuary who has recon-
mended this new departure from ssthe prnci-
pies and rules of life Insurance. has held his
actual Office. we are informed, not more than
two years-a very brief offset to the in
tie nevertheless steps boldly forward to
dictate a novel policy in opposition
to that which has been 50 successfully tested
both in Great Britain and the United States.
The Encyclopaedia Britannica in it's elab-
crate article on insurance, says in reference
to Mutual Societies, "a higher rate of pre-
MUM than the risk demands is generally
charged, to defray expenses of management
and at the same time increase the basis Of
security" For century past the closest
scrutiny by the first mathematicians Of the
age OF the principles which form the founda-
ton of life insurance has resulted merely in
q strict adherence on the part Of all reliable
companies in Great Britain to the old-estab-
lished rates-rates which are, indeed, far
higher than our own.
Life insurance is Of no value unless it gives
security in the future. 1t is for this reason
that yearly charge is made, sufficient not
only to cover the cost of insurance but also
to provide for contingencies which may be
beyond human control. Among such con-
tingencies are increased mortality arising from
epidemics, or errors in the mortuary tables;
the possibility of changes in the value of
money-a most important feature in the sys-
tem-and various others, against which all
business men deem it but prudent to provide.
To consider the chances Of unexpected claims
should be the guide for all well-managed life.
companies. From these claims, as we have
recently seen, the fire companies have no i'm
munity. Experience teaches that unless am
pie provision against them be made there is
no real security for the public.
In view Of these obvious facts, and of many
others which equally contradict the argu-
ments urged in favor Of the newly y-recom-
mended reduction of rates, it is not surprising
that grave apprehensions have been excited by
it. Not only are the seventy seven thousand
policy-holders Of the company in question: to-
gether with their heirs and assigns, deeply in
terested in the proposed experiment. nt-which
not few Of them protest against as s. exposing
them to injustice-but the policy-holders of
all other companies are no less deeply inter-
ested in it as revolutionary in its theory and
its consequences. 1t is true that there is no
legal restriction in respect to the reduction of
rates-each company being at liberty to de-
eide for itself But all companies, including
the one which has just proposed it. will be
directly or indirectly affected by it. Eighteen
or twenty leading life insurance companies in
New York have already, we understand, met
for consultation on this subject of great i'm
portance to them and to the public at large.
Why should not convention Of all the COM
panies throughout the Union be called to de-
liberate upon it? Why should not On appeal
be made to our most eminent actuaries to de-
the actuary who has initiated this attempt at
revolution in life insurance intimates .sthe
poorer classes" and all other classes, have
been hitherto compelled to advance money
beyond the true price of assurance" the pub
lie should be enlightened as to what the .'true
price actually is Let, then, experienced
actuaries declare and prove the real principles
of life insurance, and let all the life COM
panies agree to abide by them.
PERILs OF THE LAKES. Winter brings its
perils on the lakes as well as on the ocean.
Two barges and two schooners have been
wrecked on Lake Superior, and all on board
are supposed to have perished. About this
season of the year there is indeed, greater
danger on our inland seas than on the ocean,
and the tragedies on the lakes for the past
twenty years would furnish volumes of sad
reading Yet there is probably even more
recklessness displayed in their navigation