New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-01-29
NEW LAMPS FOR OLD ONES.

.NEW LAMPS FOR OLD ONES.
A few DAYS ago, referring b the public III
tcrest in life insurance, we presented some
figures showing its magnitude and the extent
of the benefits actually conferred by the sys-
tenn. Many more of the same class OF facts
might readily be presented. Our summary OF
payments by the companies was confined 10
settlements for policies that expired by dcath
or their own limitation. Bat this Is far from III
Guiding all that the companies pay to policy
holders If the amounts paid for snrfehdereu
policies and for so-caled "dividcnds had
been included in the estimate, the total pay
ments to policy holders would have footed up
for the single year 1875, nearly S6S.0OO,OOo.
Extending the estimate over the past
five years, we find that the life insurance
companies of the United States have IN that
period paid to policy holders $500, 200 600. 1t
might also be added that this sum paid out
largely exceeds what the companies have re-
cciyed. 1t has often been asserted that the
system is too costly and extravagant; but at
worst its cost, including all losses by failure
and mismanagement, is far less than the i'll
terest on the sums handled. 1t is cal
cuated that three million people III
this country have personal inter-
est in life insurance policies; that two
thousand million dollars are promised by the
policies, and that four hundred and twenty
million dollars are now in the hands OF the
companies ready to meet the promises as they
mature. We do not believe that this great
interest is seriously endangered by the wave
of distrust that has rolled over the
country since the recent failures. We do
BRt sh3igF ilh itt..J ruin vii oyerlake the
weak ones 90 down under this Winters exam
nations. We do believe that the sound con-
Germs will be strengthened by the ordeal. We
most heartily deprecate attacks made upon life
Insurance companies unfortunately and d-
rcctcd against the system as whole.
But there are a great many people whose
confidence i'm life insurance is sadly shaken.
Some of them suspect, and some of them I'M
happily know, that they have put their money
into The hands of inSolvcnt companies. There
is great deal of business afloat which sharp
canvassing "agents" eagerly seize, that consists
in the change or transfer of policies. The revea-
tons in the case of the Security Company in
cudc an exposure of its system of giving new
any reason for believing that the Security was
alone in that practice of deception. The best
companies never cOuntcnanced it, and
never will. But it has long been
an open secret that certain concerns
of inferior reputation shut their eyes
to the process, and let their agents carry out
its details. The performance is simply to
induce policy-holdcr to exchange his old
policy for Il new one. Some desirable change
in the pocy is perhaps suggested by the
agent. Sometimes the proposition of exchange
is coupled with an Offer TO give new
policy for the same amount, upon which no
premium need be paid for Il year; in some
cases the premium lis dropped for two or three
years. Whatever the preteXt, whatever the
offer, the result always lis that the company
gets rid Of the old obligation; the new one is
a new policy. On the old policy the company
was required to keep a reserve fund, proper
toned 20 the length of time that the policy
had been running and the amount to be ulti-
matcly paid. Failure to keep such "a
reserve would bring the company into
disgrace at the first State examination. But
by canceling the old policy the company is re-
licycd from this STAIN several years will
eiapsc before the required reserve on the new
policy becomes az large and meanwhile there
is a chance to recuperatc. The policy holder
has by his own act given up and abandoned
the fund which was Che basis for ultimately
paying his policy.
Most people who read in their youth the
Arabian tales, have doubtless thought that
the princess who married Aladdin was great
fool to give away the wonderful lamp for ore
of the ordinary kind. She might have known
that the disguised magician meant to cheat
her. when ne offered prepoStcroas bargain
AZ to give new lamp for an old one.
But Oh the other hand the princess
thought the old man WAS fool, and
she meant to take advantage of his folly.
Back of al this was a greater mistake: Alad-
din had NEGLECTED. 20 take his wife into his
confidence. 1t locks as though some OF the
men who have so hastily exchanged old poll
ces for new ones had made similar mis-
take. As an instance OF haste We may cite those
unfortnnatcs who were insured i'll the Cont
mental Company, and have hurried since its
collapse 10 got the Advantages of 20-yAr
term policies. Very plausible are the argu-
menis in favor Of such documents. Every
American hopes to he rich enough within
twcnty years to dispense with life insurance.
Statistics 10 not, indeed show that such
hores are often realized. The new pol