The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1877-04-02
SURRENDERED POLICIES.

AN AcTUARY OrINES THEM TO BE THE GHEATEsr
EVIL OF THE LIFE INSURANCE BUSINESS
REFLECTIONS SUGGESTED FOR THE LEaIs-
LArIvE COMMITTEE.
NEW YORK. March So 1877.
To THE EDITOR THE HERALD
Now that the Insurance Committee are diligently at
work to nd out all they about life insurance man
agemcnt Il is 10 be hoped they Will 30 further than 10
ake inquiries regarding what few officers and clerks
paid salaries This question Of salaries Is really
. minor one. man should be paid what he Is worth
In any business There Is no why successful
should be paid for his success Us much IN lie
that he should be In medicine or IN law
In trade No one should critcise the amount pa'd
an individual until the value OF the service IS KNOWN
A salary OF ST. 900 might be too much for some men
while another man might be cheap at many times the
amount There is, however. question that the In
surance Committee amusc themselves with, and by
u accomplish good aud be Of real servicc to in
surcrs and the question of the treatment OF
policy holders who compelled 10 surrender their
policies.
Tho somewhat recent failure OF the Continental
Security and New Jersey Mutual has brough. about all
this life agitation because II Is supposed
that sudden unusual and great wrong has been done
large number OF insurers. This is true US 10 the
wrong but Is not true 10 its beng unusual There
900 policy holders in the three companies
named II is no, yet definitely known just what they
will receive there little doubt that they will, on
the average receive at one-haf OF
value their policies During the year 1919 w, z32
policies, which premiums bad been paid Tor longer
shorter periods were surrendered ANA lapsed Ia The
forty i've doing New York state.
In 1876 the number doubtless greater, ana, II We
add to those ana' were ~ ,sis STATE
will probably reach 10000 Now, how do these
100 600 stand as compared WIN lne u nv me
last, know but very little about tho arst
II doubsess because they do not know, and SO arm
going to tell them will do II with specific case.
policy oil $50 O0U was issued three years ago on the
full life plan TO party OF the age OF four and at
= premium Of O93 so per year. After paying three
premiums he recently asked tho company tor sur
render value, ana offered SOL 90. The value Of
his policy according to the companys methods Of
valuation tAmercan table, per cent? ST. 525 oS
That is, this was the amount tho company had leit
a mi ssars 81 and losses A. tic
price, and they had given him just what they had
lit TO do in dividends, and the amount remaining
belonging tho policy was, stated 81. 525 OS,
and when tho insurer asked Tor it he was offered
thrtythrce and halt per cent the company 70 retain
tho remainder. DO claim that all Of The l50, 900
treated as badly as this ono, and yct the policy
in the largest company in the country and q COM
pany which Is member of the Chamber Of Life In
surancc, aud may he taken TAR index Now
which Is the greater evil, the occasional failure
Of Il small company which gives an insurer at least
haii OF his reserve, or tue practice OF our leading
companies In dealing with policy holders who have
TO surrender their pocicsy
1t Is simple nonsense to say that lite company can
not pay surrender values IN cash. Why notY They
have the money II they are solvent belonging to the
policy do not INSIST that they should be compelled
by law TO gvc zach applicant all OF his reserve,
but do insist they should give him more than third
vi It, There be but two why the full value
OF the policy should not be paid surrender value
l. That funds have 10 be invested in order to make
high rates OF interest, aud company OF necessity IN
no condition to stand II TINS why have
not savings banks long ago found IL outr II Is
simply a that the Investments Of life insurance
companies and OF savings banks arc almost precisely
the Character The latter are AZ any time
liable have every called Tor but II is done
rts,las Din NJ nVa ufnLn
advantage OF The thirty sixty or ninety days allowed
them by law
2 1t is claimed that whenever a party surrenders
his policy he be healthy life. That insurer,
knowing himself TO be out OF health would lind some
way OF keeping up his policy. That, IN consequence,
whenever i policy IS surrendered the company - left
with undue proportion OF unhealthy lives This is
good rcasoni.g II is plain that while company could
Afford 10 pay all OF It's reserve to ali OF lis pocy
holders and have its surplus lett II could AFFORD TO
pay one-half its reserve to onc-han of Its policy
holders, allowing only those who chose to do to
ccpt The extent Of this is however, easily got at
asks Tor the valnc or has policy, and offers
pay Tor replacing his lite, presumed to DO healthy
be healthy by examining H. He oncrs, say, one-half
tic premium, and lilly per cent liberal commits
sion, and with It any company easily replace the risk
Having done this harm will have donc To any
one. The company will ba IN precisely good con-
diton before and the insurer will have got fair
value for his policy In the cited would amount
this-Thc party s insurcd for $50 00O less the
OF 81, 525 US, tor SIS, Ala ~. The premium
on this at the ne age Of forty seven Of aud
hall q is s5ss Thus is certainly liberal price 20 pay
but would give surrender value OF 1857 OS. instead
OF the $5ll 10 offered.
TO be questioned regard TO the management OF their
business, they Should be made 10 tell, aud in de-
rail, how they tho who unable to keep
up their policies The evil Is not an occasional one Il
~ gong all the time II amounts vt least twice
much IN each year as did the failure Of tho three
companies recently. Let tho companies be made To
tell what they do and why they do IT. and then, u we
a lite insurance bill. lot this greatest
oil all evils IN life insurance management be ed.
w W. BYINGTON,