The Jeffersonian. [volume] (Stroudsburg, Pa.) 1853-1911, 1873-02-06
Some Facts II Life Assurance.

In 1912 the first life company was or.
ganized in America in 1861 there were
sixty thousand policies in force, assuring
one hundred and seventy millions of dol
lars. The ten years following l871-years
characterized by plethora of paper mon
tunes, lavish outlay, and the prevalence
Of speculatiou-were remarkable for the
steady and large increase of the business
By the end Of 1871 there were in force
over eight hundred thousand policies.
guaranteeing more than two thousand
millions of dollars In 1871 alone there
were issued by authorized companies OF
New York nearly two hundred and ten
thousand policies. Iu 1861 the total in
come Of the companies was less than sew
en- millions, and their total assets under
thirty millions in 1871 the income must
have been one hundred aud twenty five
millions, and the assets considerably
above three hundred millions. Nothing
more striking than these figures can be
deduced to show the favor life assurance
has met with, the great power it has Sc
cured to itself, and the trust that has been
placed in its management But there is
another side to the picture, which is not so
fattering
When policy is issued. the contem-
plated method of its termination is the
death of the holder or the expiration of
the term for which he was assured. Tn
der the heads of death and "expiry"
ought to be found, therefore, all or nearly
all the policies terminated in any given
year. How nearly the facts correspond
with the reasonable expectation may be
learned from the annual reports of the
New York Insurance Department. These
reports deal merely with the compaies
authorized to do business in New York,
but they cover, nevertheless, a very large
proportion Of the country. From them
it appears that ia 1864 (the first year for
| which returns were properly classified, }
of the policies terminated Excluding those
changed" aud mot taken''), but fifteen
per cent. ceased through death" and
! ''expiry," aud that even this small per
centage had shrunk in 1871 to less than
seven and half! The decrease in the
| number terminated 10 the natural and
pIOpGT EctuOuS UcSu dCCUHp ny
| an increase Of thuse ended in modes
which are a reproach TO the business
| The modes here referred to are "surren
| der" and "lapse." 1t must be understood
that in surrender the policy is delivered
! up to the company for small considera-
ton, and is cancelled; aud that in lapse
the company cOnfscates to itself all, be it
much or little, which the unfortunate
holder has paid upon it. With this uu-
derstauding, the significance of the fol
lowing facts will be apparent. The fig
ure are taken, as before, from the New
York reports, and policies ''changed" and
"not taken" are not considered In 1864
twelve per cent. of terminated policies
were surrendered, and seventy three per
cent, lapsed-aud lapse and surrender
swallowed up eighty Eve per cent. of the
whole in 1871 twenty one and third per
cent. lapsed-and lapse and surrender
took the lions share of nearly ninety
three per cent. Verify, something is
rotten 10 the state of Denmark" In view
of the average experience of the last
eight years, it may be said that of every
ten policies which cease, but one will do
SO by death aud expiry, while one and q
half will be given up for slight com
pensation. aud seOen and q half will be
absolutely thrown away by the holders
The numbers of policies which fail of
their proper use would perhaps, surprise
the general reader more even than the
statement of percentages. La 1871 the
numbers of policies really terminated in
companies of New York was l24,215; OF
these, 9063 were by death aud expiry !;
145,2l2 lapsed and were surrendered, of
which S8,706 were by lapse alone When
next the company issue their circulars
aud expatiate upon the blessings bestowed
by life assurance on the widow and the
orphan, let them devote a paragraph or
two to the loss, disappointment, and vex
alton which some way or other, through
it, are inflicted upon thousands who wish
to avail themselves OF its ben6ts and are
excluded.