The Ottawa free trader. [volume] (Ottawa, Ill.) 1843-1916, 1876-11-11
LIFE INSURANCE.

The Continental Life Insurance Company
t Of New York, has gone up, and been put in
: the hands of q Receiver. The cause it is
said, has been a Shrinkage in It's investments
Wken examined it Will probably be found an
, empty shell The lCe predicts that such
will prove 10 be the case with three-fourtas
of all the Life Insurance companies doing
business at the present day According to
the calculations of the best aCtuaIies full
three-fourths of them must and will fail; but
the directors and other principal officers Will
all retire rich, according to law, out OF trust
funds committed to them.
These failures of life insurance companies
savings banks and kindred associations are
entirely too common, and if public confidence
in such institutions is daily growing weaker
it cannot be denied that there is cause for it.
Having ourselves some twenty years ago fall
en- victim to the blandl shments of a life in.
surance agent, we have had occasion to give
the subject a little thought and investi
CATION, and the result of our cogitations is
that the whole business is little better than a
huge swindle. When we invested, to the
amount of say S75 year, in one of the old
est and best institutions in the country, the
agent blandly assured us that our payments
would, after few years, commence gradual.
ly to decrease, so that by the end of 20 years
if happily we lived so long, the payments
would drop off to mere nominal sum if they
did not cease altogether Yet those pay
mentS have remained about the same from
year to year during all those weary decades,
the highest beng about $15 and the lowest
thus far about $72.
Now this is mutual" company, in which
the insured are said to share all the profits
The source fprofts, we were told, lay in the
loaning OF all the surplus money paid in at
compound interest, and in the further impor.
tant fact that of all the policies taken out
from year to year, not over 10 per cent "a
paper before US says not over per cent? ul.
timately enured to the benefit of the assured
or their families by reason of the payment on
them being discontinued by the insured and
the policies lapsing. In partial contirma
ton of this view we have before us some fig.
ures of certain life insurance company,
NOW collapsed,) from which it appears that
the amount paid in during ten years was
about $l300O,000 amount paid for "expendl
lures about $500O,OOO, amount paid on ex
pred policies about 100000, and the bal
ance consisted of shakey "assets." This may
be an extreme case, but we imagine, could
the figures be gotten at, the "firstclassest"
companies would show results not vastly
different. So that, at the best, the insured
pay into the companies about $10000,000 for
every $3,000000 that are paid back to them;
the balance being eaten up in dividends on
stock, gorgeous palaces to do business in,
commissions to agents, and other extravagant
expenditures
Now, aside from the objection to life in.
surance on the general principle Of Its being
"a game IN which one must die to win," we
have a suggestion to make that may be of
interest to persons who are anxious to lay up
something for rainy day. There have late
ly been elaborate articles in ScrJner's Month";
ly, the Penn NOhthlH and other firstcass
publications. on those peculiarly Philadelphia
institutions known as Building Associations
Their stu,ial features and mode of opera
ton ought to be pretty well understood in
this community for we have had a building
association in successful operation for the
last four years in this city Had we invested
our $40 year in such an association for the
last twenty years, we should have realized
by this time at least $1,000 more in actual
cash paid down than our heirs will realize
on our life policy, should we fortunately be
able 90 Neep up the payments on it to the
end; while, in the case of the building asso-
citation, there was no need to wait until we
should die to realize Then there is no need
of losing any payments into the building as
soclation by allowing your policy" to lapse.
When person gets tired of paying install
ments on his shares he can at once draw out
all he has hitherto paid in, and the associa-
ton pays him, in addition, 6 per cent. inter
est on the amount. 1t Is thus not only vastly
better than life insurance, but better than
depositing in savings bank. The interest
on dCpS.i,s In the building association CON-
mences Immediately, while in most savings
hanks the money must lie from one to three
months before they commence paying inter
est. Then savings banks have most disa-
greeable way of bursting up every now and
then. There is hardly month but we hear
of some savings bank or other blow ing up.
But building associations, in their very ma
ture, cannot hurst up Their officers can't
steal the money, for the money is always
loaned out as fast as it is paid in, and all the
stock holders are present and know who the |
borrower is and what security he gives. SO
instead of fooling your money away on life |
Insurance, or rlsking too much of 1t in saw
ines banks, we conclude rs we began, by |
suggesting that people who have money TO
Law aside tor rainy day, and especially such
as can do sO only in small sums befora they