Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1875-12-19
The True Idea of Life Insur.
ancp.

life as capital as Gavihg a defnite, absolut
value 70 noney-not 10 Itself, Est IN some on
productiveness OF that life for the accomplish
ment OF certain pecuniary results, which ar
endangered by the liability that the life may
prematurely fall egRinst this danger IL offer
. indemnity. The life OF the husband and fathel
produces Tor his family, home, food, clothes
, 5dtcati0H, and every means OF Improvement
and usefulness. in a word All they have A nd
are, or can hope to have or to be, comes, and
IS 10 COMO, frcIn his toll and care. The cost oi
shess things from dey to day Is the money
value of his life 10 them. sum tip the cost OF
these Tor all the time he should live to reach
the limit OF existence, and you have the full
Yalueos his life; the actual money capital II
represents 10 them, that which they would
,ose, ard arc sssIy IL danAsr OF losing by his
death. death. To illustrate by figures: A man aged
5000; they win need this sum for an indefinite
future period, probably 50 long as he nay live.
his average after lifetime is, say, thirty-five
yearP. They should, therefore, be enabled to
receive this annual income of 5000 for that
period, at least; but this income is under con-
slant hazard of loss by his death. Now, the
present value of this income-that Is, the sim
gle sum OF money which, being put at six per
cent. In sersSt n III produce the 5000 each year
| FOR thiTty-hve years-is $i4 coo. nearly; this
sum, then, is the cash value Of his life 10 his
| family; tins Is their own rightful property in
his life. whssh, instead Of being secured to
any MOI i4sht lose wholly and forever; this
! s1In they must have ready TO be provided in
! the erD9xSeacT to make them whole pecuni-
arily fol the loss OF his life. his is the aver
| age pecuniary equivalent OF his life.
This sum life insurance does so provide.
| 1t brings together multitude OF men aged
thirty, and makes them agree with each other
| that when one dies, the survivors will pay to
his family the cash value OF his life, which
| they accomplish after ascertaining the rate OF
mortality ana assuming safe rate of inter-
| est, By paying into the common fund a fxed
sum each year OF their lives. The money loss
tails, not on the helpless family, but on the
| working, producing multitude; and by thus
| having constantly provided the value of each
for VhcfWr ,f,,1
| its head would provide II living. In a word,
| their risk of loss has been assumed by the
multitude, and the cash value OF the average
lifetime OF the husband and father is secured
to them beyoud cOntlL gency.
And so in general terms, no matter in what
particular personal relation one may stand as
regards others-whether as husband, parent,
debtor, or otherwtse-if any one be entitled 10
receive any benefit OF his productive energy,
mis- life represents SO much money capital
with a constant hazard OF loss against which
life INSURANCE furnishes indemnity
The most any company can do is TO oner
this protection at Its lowest actual cost. This
Is its single office and only merit. And this
should be sufficient to recommend 1t to all
ght-thinktng men, and would be were II
Insured with view to personal profits from
'dividends," and there is a widespread error
in the popular mind which needs correction,
The ordinary use OF the term dividend" Inn
plies division Of the profits arising from the
employment OF money. This is what people
are led to expect in life insurance, and the OBJ
ject Tor which many mainly insure. 1t is time
this word was discarded, and mode of eX-
preston used which shall convey the truth;
what is called dividend is simply the return
of surplus, unneeded premium; the adjust
me1it of the actual to the assumed cost OF in
surance. To guard against unforeseen cont1n- |
gencieS, we charge, at the beginning OF each |
year, premium which we fully believe to be |
too high; and when the experience Of the year |
has shown just what premium was actually |
needed, we return the unused balance, where
by the insured has had his insurance at its |
cost 10 the company, which cost, to the fndi- |
to
TO the insured, button the contrary, a constant |
cost,to reduce which TO the lowest practicable !
point is the sscord important object OF man |
agement, security being first And the error |
Is in suppostng that these returns of surplus |
are actual dividends of profits, instead of be- |
ing merely reductions of cost.
The error has had its rise partly in miscon- |
ception, and partly, no doubt, in the desire TO |
avoid the principal obstacle in the way OF the /
acceptance OF life insurance upon its true mer. |
its. he obstacle Is simply selhshness. A man
tnsures himself against the loss of his own /
property because IL is his, his capital, his |
right, and its loss Is his damage and distress;
self-tnterest is at the bottom of the act. But |
life insurance Is a purely unse fish act. 1t |
calls upon him to take of his own money and |
lay 1t aside beyond his own control; to part |
with 1t now and forever, to protect others
against a loss In which he has no pecuniary
concern; TO create benefit in which he has
no share. He must sacrifice something of |
what he has earned, which he likes to handle |
and call his own. The self-interest which
prompts him to insure himself against money
loss which he may incur. is precisely the
thing in the way OF this unselfish act for the |
sole benefit of others. And it is the desire to
evade this plain fact that has led many TO
draw attention to the large returns of surplus
as something produced by the employment OF
the hen! money t paid aid for premiums and 90 soc endeay-
ance addressed to selnshness of the In
sIred 81 ,rs,sso personal pSSS,n0 profit r,I0 to
him up 10 ,.se level OF his plain duty of self
sacrifice. And here is the argument for life
surance: : Ii DUTY. He has assumed vol
~ N-i1N flNa nufN oF for
lily; he has made them dependent upon his
lie; he has compelled them to look TO its re-
suits as their capltal-their all. Hehas entered
into solemn engagement with them, and
with society at large, that he will care for
them in all their wants, and neither leave
them burden to themse YES nor the worlds |
charity. He is responsible, and he alone, for
their present and future welfare, and is bound
by an obligation he cannot escape, and for
SO Tar as be can, Just as carefully and jealous
ly as their present. Their future is in daily
hazard of the loss OF his life and what it pro.
duces for them. The risk they bear, not he.
He has imposed 1t upon them he Is bound to
protect them against 1t; they cannot do 1t
themselves; he has made them powerless to
do so. And there is but just one way in which
he can do 1t; he must insure his life for their
benefit; he must provide the substitute, the
this does it, and nothing else does. 1t is the
one means whereby he can 1ulfin his obliga-
ton to them which he cannot escape, and his
obligation TO society as well. He must foregO
his own selfish pleasure and forget his selfish
to do his dependent ones this sim.
pie justice, for the neglect of which he cannot
answer to them nor to his own manhood He
must not place himself in the way of their
protection. That is simple, wanton cruelty to
those who are powerless to defend themselves
against 1t. He has no rtght--nay, 1t is coward
ly in him-to leave them to bear the risk of
his life He must pay the company to do 1t
for them. LA.
This view clearly understood and accepted,
how can men fail 10 finally act upon Ito do
their simple duty, and for duty's sake; to see
that the family, the unit OF society, upon
whose welfare the whole fabric thrives or suf-
fers together, is cared for, its wants supplied;
that its purposes may be fulfilled throughout
It's duration; that every home may be made
TO endure while any live to love 1t, or need its
grace?
A wise man, seeing the necessity of insur-
ance, will be careful TO select a company that
Is old and strohg-that has been thoroughly
tested in every way, and concerning which
the g can he no possibility Of mistake. None
but the very best will satisfy him. He cannot
afford TO try experiments with the risk OF los
ng both his Insurance and his money in weak
and doubtful companies, but will seek TO
place his insurance in q company where the
security furnished is absolute. There are such
,om panies. And among the very best-aT d,
Is those Dest acquainted with its affairs fully
believe, standing ioremOst-is the