The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1875-05-24
The Advantages and DlSadVRn.
lnEeS OF Lille Insurance.

, eHNV w wv 'Nt - "'"JN''hy We h''""N "'"
are charged with the responsibility Of
providing for family. One Of the per-
picking problems Of our modern social
life is as to how men in moderate cir.
cumstances, whose earnings are barely
sufficient to respectfully support and edu'
cate their children, may provide, by the
payment Of u small sum each year, GER
tain support, in the event Of death, for
those dependent upon them. This posi-
mOrtem support life insurance proposes to
furnish. And there can be no question
that n life insurance company, properly
organized and ably and honestly man.
aged, comes nearer meeting this great
desidcrAtum than any other means yet
devised among men. Yet nOtwithstand'
ing the fact that life insurance proposes
to meet one Of the most elementary ne.
cessities Of our social life, It Is neverthe.
less so little understood by the great
mass Of the people that those for whose
benefit it was originally devised are in
almost total ignorance Of its practical
workings. The purpose Of the present
reference to the subject is to give TO our
readers some explanations Of the advan.
tages and disadvantages Of this subject.
In the first place, We may remark that
the whole fabric Of life insurance Is based
upon the uncertainty Of human lie. II
a man could be sure Of his life for given
number OF years there would be no ad.
vantage in insuring itduring that period,
simply because the money used In meet
ing the annual payments could be en-
ployed more proftably. There would
be no advantage in paying out an annual
premium for twenty or thirty years, II the
insured party was certain Of his life dur.
ing that period, But 1t Is the great ele
ment Of uncertainty in regard to our ex'
istence that life insurance undertakes to
provide against. Moreover, life insur'
ance companies are becoming the great
savings banks of the country. They
unite n provision for the family in case
Of death with provision for old age IN
case Of life. Although designed in their
origin for persons in moderate circum-
stances, their benefits have been taken
advantage Of by the wealthy, and we now
see men worth their millions taking out
large policies. But there are some &C.
rious objections to life insurance which
we must not overlook, and which some
argue almost neutralize the great advan-
tages conferred by II. One Of these
arises from the nature Of the contract
which parties are required to enter into.
For instance, most policies require that
the annual premiums shall be paid on or
before n certain day. In the event Of
the failure to pay this sum, the policy
holder forfeits not only his claim to the
policy, but also his prepaid annual pre-
miums. No other branch Of business
displays such disregard OF equity.
Law requires us to forfeit only that
which we fail to pay.
Another drawback to life insurance Is
in the management Of the business. All
the expenses Of the company must be paid
out Of the premiums. The greater the
expenses Of the company the more costly
II becomes to insure in II. Fraud Is not
common in insurance, yet when the cx-
penses OF some companies are considered
VIC cannot avoid the conclusion that they
are managed 80 poorly as often 10 SC.
riously diminish the benefit Of insuring in
them. The reports Of the Massachusetts
Insurance Commissioners show "that the
average annual expenses Of all the large
companies in the country generally
amount to nearly or quite 20 per cent OF
the entire premiums received, and in
some years to actually the amount paid
out for losses by deathr' Where such in
stances Of extravaganza occur the tounda.
tiOns Of life insurance must bc somewhat
insecure. For this reason proper precau.
tions should be taken by persons ptopoS-
ing to have their lives insured, to learn
the character Of the company for thrifty
management.
In order that the reader may have some
knowledge Of how Il ia possible for com.
pany to pay thousands Of dollars in re-
turn for few dollars, we will, to make
the case clear, suppose that the person to
be insured Is 80 years Of age. The tables
Of mortality show that in the case Of
person Of this age there Is only about one
chance In l2O that he will die the first
year. The other ll9 nfe In favor Of his
living. In other words, out Of 10000
such persons we may expect that "a will
die the frat year, while the remaining
9,9iG will survive. Hence, II such per.
son, 80 years Of age, desires to have hiS
life insured for $iOO, he can have II In
sured for "a cents; with an additional
small sum to pay the company for Cx-
pcnses. Now II his chances for life could
be always IA good as they nre the first
year there would be no necessity for his
paying an increase on his annual prem.
iums But life Ia not 40 measured. II a
man lives a year, every succeeding year
the chances Of his living are le''encd. So
that IL would be according To the law Of
equity for him to pay more the second
year than the first, and thus The annual
premiums would he increased. But in
order 10 obviatc the necessity and trouble
Of levying this increased annual payment
each year, II il customary TO make these
payments from the outset sufficiently
large to cover all possible future riskS
The excess Of these payments above the
actual tiaks Of the frat ycnrS, the com.
pAny puts out nt interest, In order to
make up the tisks Of future years. The
investments thus made 60 on increasing