New-York tribune., 1875-05-14
PAPER BY ELIZUR WRIGHT.
rIrr INSURANCE FOR TIE POOR.

LIFE INSURANCE FOR TIE POOR.
The question propose to consider is, How
life insurance can adapted to the wants OF those
families whose sustenance and education depend not
upon accumulated wealth. but on the weathaccumua'-
,ne faculties of some their members In our country
such families abound in all classes of society," from thoSe
OF the those OF the highest culture. bn' III!
question regard specially the lower stratum for In
the upper where the mind is the chief weahrroduchg
faculty the poverty which results from the premature
death OF the wealth-prOducing member OF Iamly
usuay stops short OF paupesm. There are social sae-
guards besides life insurance toprevent the fal III is
the early death OF the manual abcrcr which more ofen
consgns TO paupcrism q family which would have con
timed To rise in scale OF happpness II his nte had
been prolonged 1t is to the destiny of such family tat
life insurance is of highest relative importance; and
II in this quarter that its benefits thus FAR e pcen
least available. ,.-..
In order adapt life insurance TO the elias that most
need it, must clearly understand what It really ii isIms
faults well rs its merits, lis various modes anu nlh
tons and their relation TO the ee onts obyions that
laborcrs of sound health and morals sch as are pr3r
subjects of general rule, Will accumulate
old arr if thcy i've to become old Hence the necessity
for insurance will naturally decrease as life Is PROLONGED
insrancc large al first and gradually diminishing, will
better nit this class of people than one where me amount %
continues the same. In all games of chance, one VINO
understands the laws which govern the game mas te a
smrance TO the poor il should reduced to the utmost
simplicity. as to be within the comprehension
painable their comprehension should be abstained
from il possible, and the expenses should be
cauced s their circumstances 1t is not to be eX,
pcoed that the poor or, for that matter the rici VII
ever generally understand the n'rcaees OF algebra that
usually cothe the doctrine OF chances but the poorest
laborr read the Arabic numerals and cipher as iar as
the rule OF three and hence capable OF
from first TO last any life insurance pohcy that Is NJ Lor
him to take, if the figures are honestly set before MN
To show % Just nGT e e. p II o fSe ccnmstances Of
poor shall have TO revert to the first principles OF
pardoned even If It proves little tedious In any table
of mortality the ultimate ia lO0 trhe more or
less BY comparing the number in the table set down as
living 10 attain each year of with the number who
will die from them before attaining the next year OF age
we series OF ratios expressing the chance OF per
aYs ,Cns onSe1 a{S bis Chance Of dTSc within YEAR in
creases more less rapidly, from any given age
10 the ultimate when, according 10 the table, IL
becomes a certainty Hence, if a company nsurcs
for his whole life Tor gwen sum- payable whenever he
may die 1t will aluialy bind Inn TO pay series OF an
uul premiums corresponding with this selIs OF chances
Zach premium will simply cover the risk Of his dying in
the year entered upon not to speak OF any margin for eN
prnse of conducting the business for extraordinary
mortality. Consequently these premiums, which we VIII
natural because each exactly covers the risk for the
whole face of the policy for one year. and net because
margin is left OF consideration, will begin small and
gradually and almost impercepbly at first but
the ultimate il the insured lives 10 reach it, he will
pay as his last annual premium the whole sum insured,
less years interest fe insurance mas often been
attempted OH this natural llan b Tor obvious reasons
supply Of fa beyond possible demand for
IT, but there is nothing to hold the insured to pay the in
creisng premiums when he gets tired OF doing It, Al
the end any policy year the healthy subjects might
step out and leave the SICK ones on the company.
The insurance beyond the nsIabe interest, the mathc
aticins OF hundred years ago mitgaed IT, and effect
lively cured the security for persistence by com
nutn the series of increasing premiums into
single premium. into series OF equal annual prcmi
ums payable during lie, during limited part of it,
should il exceed the limits Such premiums were substi
iuted for the natural ones in all life insurance contracts
- LIT me revert 10 communication 20 say, finally and
ennhatv tnat the effect of substituting the payment
of The coAuted or artificial premiums for the natural
ones of the mortality table, If the policy continues Till
death or the its term, Is this and more and
nothing IL takes OFF from the company large part
OF the insurance which wOud have been done by IL If the
il insured himself And this is all the better for
company, he probably WIN, and the company honestly
and inteigently utlls its trust Though the selfnsu-
rance, as long the policy continues In force.
cannot bc touched to pay any expense or claim on
another policy, ii becomes available as surrender
charge" TO the persistence of the premium pay
mrnts As policies formerly and of them
now drawn, the whole OF is forfeited TO the company
violation any other condition. On whoee policies,
very long endowment policies the whole of 1t is prob
second, perhaps the third or fourth premiums But
after that and sooner on shorter endowment policies
the whole Of IL as a charge becomes more and more
excessive In fact, equitable surrender charge can
have reation TO the magnitude OF the selfnsurance
fund but only TO the loss which the company, an IN
surance company, will experience by the Withdrawal Of
a life better than the average. and this will be proper
tonate TO present value of the insurance remaining
to be done by the company under the policy, which
be called the insurance value.
When young insures his life it il much
probable that he will 10 need insurance within
thirty years than that he will die within that period
Hence 1t is important that he should be careful to slip
ulate on what terms he 90 out well go In
asmuch AS he Is, 10y paying the heavy coinmued pre-
MUM trusting the company a bank even more than
he trusts it as an insurance company ne ought 70 have IT
the bank each and how much ont Of that the com
pany will charge him for canceing his policy, as mat
ter OF Insurance II he sees NJ to pay that charge ana
have his insurance stopped, his balance IN the bank
And this balance is the surrender value OF his policy.
That be stipulated from the start safely
csely and absolutely, the death claim itself can be- Is
what is sometimes asserted but never proved What in
deed Is an endowment policy but policy with definite
pNslnf fif.fQf I4f 1gt egpfg
tndrr the same policy, Ia there any more difficulty
N STIMULATING the sum which the company VIII pay al
the end Of previous surrender o the policy
Or is there any difficulty in seeing that the charge for
Cameo lmen should diminish as the value of the Insurance
Cancelled dminshes The necessity Of such arrange
Incnt men to I've the subjects of insurance is
too Obvious to need remark As have already hined
tho ordinary rule makes the surrender charge percent
age OF the reserve From 25 TO so cent OF the cash
reserve is deducted and the balance is the surrender
value paid in cash But IL Is fayOrte plan with
the coraSS 70 ysaa. ys Ps,d poc for @ as much as
will buy be the single premium Of But "paid-up'
Surrender TaIue II particularly awe%ard @ er@ of prop
erty for any TO have, especially
which win keep up an annual am premium policy equal to
The Tor Example o 0S IS n" ana " tue Sd
iniST interest of tiat $3.50 discounted year. viii
gsir'ooo If yoa want to invest the $500 in in
snrance II is just the same whether you take the paid
mp policy 81 500 in the insurance COMPANY or take
out OF Il enough pay the annual premium 3f 900 in
syinSs bank supposng interest the in both In
either case II you die within the year. your hrirs WI III
dTon IKE insurance at the end Of the year VIII MAKE
remarkable difference For the padnp OF & S21 ,e
andit will do noonmony wei syes yoa as mneh aa a.
&5O ~ Won lad Put its principal there. SO much fOT l
sbsd q bsg surrender charge On s G pcS ao% S
fcnt IL really ought to be- and nathematcay Is Dh
In theory, purely mutual lfe insnIace i cHln
pany Ia the cheapest And equitable surrender V.s
were stipulated 20 hold the managers 70 as stc.
AND close q responsibility as those VI ~. saNI,.s ,.
dc,l would be no dt1cuIly