, 1877-02-25
LETTERS FROM TIE PEOPLE.

4LLEGlI1AAFE fLANS OF LlFE-ISSURANCN
[ To tie Editor ef Tnz Tribune
CHICAGO, Feb. 24.-Siuce exception has been
taken to describing tontine policies ~ gambling
In Me-insurnnee, which was done in pote to
THE TK1nUzK, published Feb. g, perhaps tbev
should be more accurately defined. Il Womb
he substantially correct to say that th,s
species OF lifc-pofcy, which Is adopted
by only t"'o or three companies, consists OF two
nearly equal parts, one part life-insnrance, and
the other part betting a:.anst the futufc with
enormous odds against the policy-holler. and
with the stakes put entirely out OF sight Or
reach Tor fifteen or twenty fears. So far as IT.
Is insurance Mt all it is insurance that Is ahso-
lutely prohibited By law to every companf with
in the limits Of Massachusetts; and it Is exactly
the.opposite Ut the limited payment uon-forfeiff
ing pulcy+ which is universally adopted, Al tie
tontine is rejected, By tie reputable companies
OF atl States
policy-ho1der shall not have the insurance yalue
with different pcriols it would vary frdm four
tffths dovu to two-d.thS) OF his premiums il he
dies within the tontlne period Commonly fifteen
or twenty years), ind in addition to that stfpu-
lates and agrcss that If, BY oversight Or mis-.
fortune, he fails to make every payment Of
premium on the day 1t becomes due, he shall
Internationally forfeit every dollar be has pad.
The former guarantees that the poliry-hol1er
shall havc very nearly tho full insurance yalue
OF the premiums he has paid"
The experience Of the Oldest and best COM
parties Tor thirty years indicates that they can
afford to return, and they. are now returning,
the poiicy-holIers about 20 per cent Of tho ordi-
naEY lf:c-policy premium at the end Of the first
year, about ~ per cent at the end Of the tenth
year, and nearly 60 per cent ut the end Of
the twentieth year.
Under the tontine plan, these accumulated
dividends, with their interest aud compound
interest, remain in the Companys hands, to be
wholly contiscated, If the policy holder die
within the fifteen Or twenty years, or II he fails
Tor day in the prompt payment OF the pre-
MUM. When the great majority OF prudent
ods Of conducting 1t, aud when only an e1-,
tremely small number adopt such meth
ods, suspicion always falls upon the few,
and when men put money into the hands Of
Others with an agreement not to ask for any
accounting whatever for twenty 5eals, thsy
were upder suspicion. The dividends rot.
returned to policyholders, but remaining
in the Company's hands, are, BY the
published plans aud prospectuses ~'ot
those companies, considered an indebtedness Of
the Company to the so-called Tontine Savings
sums SO retained aud accumulated ought to Be
treated as liability iu the Company's financial
exhibits. But owing to the defectfve form of
statement required BY the various State L.
6uTI0ce COMMISSIONERS, [nlS 1nQeuleuDfN -
not treated as liability At ali, but Is
merged fn the general surplus fund Of tAe Com
pany- Las: year the Massachusetts, C0mmls
sioucr undertook for the fist time to ascertan
what part Of the surplus funds helonyeI u to
tontIne claimants. And this was the reply be
received from, the Company most largely ea.
gagged in the toatine business:
The estimated surplus on tontine roide&h
81, 900, ,9oa.''
What credit can be given to any financial
when the maker OF it can, Of VII,
only estimate his Indebtedness By the ronoa
million.
The thirtieth annual report Of large Cora-:
3any, which abandoned this species Of insus
auce after three years' experience, Company
moreover not especially distinguished fof eaa-
,lous and conservative management, consane1
lc following:
This experience satisfied the trustees that las
'lan, 1 lis nature, II wholly outside Of me ptoEt
an1e u legitimate life-lnsuraace, being ittle eE
han contract By which the Company hnas Msn
o execute an unequal wager. securing the A19
o the winner In such q wager as this, me lias
.eedy, whom life insurance il espesssn!;
assigned to protect. are pretty sure 70 Pn9ss P2ss
nc losers. Hesides4 the large accumaladons Has1
ontinc insurance gathers In the hands Of eo@
AMY, at the expense Of those who die Or aee naa
lie to maintain their policies durfpg tue tonIas
eriod, offer strong temptation TO Hatleim T.
cnu!tnrc, which nust sooner or later pE1aS W
ppointment even to the Survivors OF tnoss
'0' ~ '04A'"' 0AS4'0' RW.H.