Stevens County tribune. (Morris, Minn.) 1877-1880, 1878-07-04
The Right OF Policy Holders.

There are thousands OF Life Policies in
the State of Wisconsin and the North
west which have lapsed by reason of non
payment of the premium; the owners of
which have since died. These policies
are valid claims against the companies
and need only to be prosecuted to render
them valuable. The practice of the COM
panies, in inserting in their policies, vague
and meaningless clauses, has served to
conceal any right the poiicy-holdcrs
might have, and the deception has pre-
vented any action by the heirs of thoes
who hold these policies.
Our attention has been called to de-
cislon of our courts on policy which
elapsed, by reason of non-payment
of premium, and interest on a premium
note given in part payment of premium
The court held that the dividends on
the policy arising from the funds in the
hands of the companies, were the prop
erty of the policy-holder, and that the
interest was consequently paid In ad-
vance.
There is, however, another ground to
be taken yet stronger, and easier OF lie
fence.
There is upon every policy, certain
definite and easily ascertained amount of
money which remains in the hands Of the
company, from each and every premium
paid, after all demands for death, expen-
ses and dividend have been satisfied,
which is of the nature of "bank depos-
it," and which in many cases, is sufficient
to pay for all the insurance to be done
by the company, during the whole term
covered by the policy. This fund in
case of lapse is coniscated by the COM
pany to pay Tor the insurance but any
liability to thu. policy holder is denied.
The amount which would be necessary
to carry the insurance during any future
year of the policy is as easily ascertained
as is that of the past, and if the company
has in its hands "bank deposit" sutti-
Gent to meet this demand in the year in
which the policy holder dies, it will be
compelled to pay the insurance.
This fact grows out Of the composite
nature of premium. Statute law has
already virtually decided that the ere
serve y on any policy belongs to the pol
icy holder. This is the meaning oil the
law which obliges the company to main
tain certain reserve on every policy,
and any equitable court cannot but de-
eide that the policy-holder, may at any
Cime withdraw it, or refuse this equit-
able right, and the bank deposit" or ''re-
SerUe' is retained, it can only be used By
the company, to pay for insurance upon
tue owners life. The Massachusetts, Non
Forfeiture law is an expression of this
fact.
To allow company to retain the full
bank deposit as penalty for not paying
the premium, is to deliver the possessor
of one weak Drain into the power OF a
soulless corporation employing scores OF
strong ones. T.. say as much, is to say
that man can be forced to pay for a
thing, but cannot obtain it after paying
for it.
AS an illustration of what we mean
take policy for $4,000 On the ten yeal
life plan. The premium Of $201.93 is
paid in cash and note for six years. Al
the end of the sixth year, the policy has
at"bank deposit" or reserve" of 1857 .06
about $500 of which is cash. The prem
ium for the seventh year is not paid. Tht
company lapses the policy and denies any
liability under it. The notes are not col
lectable, (but may serve as assets)a and art
an admitted surrender value to that ex
tent. The $500 in money is retained
Had the policy holder continued his pay
ments, the company could have demand
ed no more of him than his regular con
tributions to the payment of other claims
by death. This would nat exceed during
the remainder of life $3.50. This would
leave $3.50, as retained without any re
compense. But the worst feature in tn
matter is the denying of all responsibilit.
by the company.
1t is by reason of this principle, tina
the party may, and has the right to with
draw, or if the policy has been lapsed
and death occur, the heirs may collect o
the company insurance for which the in
sured has paid.
The only, and the utmost. claim which
the company have upon the retirin!
member is the "Insuranc value'' Q
his policy, which may be defined to b
"the sum aoith wIich Da6d In 0dUGnce, su1
der the assumptions, aoould exactly pUg 70
all the insurance aohich the company is
do u'ader the policy" should the INSURANCE
remain, a member through the term.