Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1878-11-13
Cheaper Life Insurance.

Life insurance circles throughout the
country have been good deal agitated by
a recent proposition of the Mutual Life In
surance Company of New York to reduce by
thirty per cent. the premium payable on
policies hereafter issued by said company
during the first two years. That this was a
bomb-shell in the ranks of life insurance
men may well be conceived, when it is known
that this proposal originates with an insti-
tuition whose assets have accumulated TO
the enormous sum of $4,000, 900, and whose
receipts and disbursements are on cores
pondingly large scale. For time il was
believed the outside pressure would be so
great as to induce the company to withdraw
its proposition; and when this failed, it was
thought probable that other leading com
panies would be compelled, as matter of
self-protection, to follow the example and
make corresponding reduction. But the
prospect at present seems to be that neither
OF these propositions will be adopted.
The reason assigned by the officers of the
company for their novel project is, that for
the past few years the times have been so
hard that large number have been COM
PEELED to surrender their policies, and that
the same condition Of things has prevented
the company from receiving anything like
the increase of membership which was an
nually added TO their list before the panic.
The mortality of the company, which makes
the largest drain upon its resources, can
only be held to the lowest possible rate by
the accession of new members, supposed to
be sound and healthy at the time of admis-
sion. The advantage of this new life to the
company in reducing the average mortality
is supposed TO be sufficient to warrant the
proposed rebate of thirty per cent. of pre-
MUM. 1t is claimed that the scheme will not
operate detrimentally to the interests of the
older members, the saving being in future
losses by death claims
1t is further stated that the charge made
against persons who have surrendered their
policies, equivalent to procuring new mem
bers to fill their places, has placed fund in
the hands of the company which can be ap-
propriated in the execution of the proposed
new plan, and the expenditure not be felt
by the older members.
In respect to the merits of the above prop
osition, while it will unquestionably operate
to largely increase the business of the com
pany-whicb we suppose to be its primary
objective must believe it will add very
largely to the growing belief that our life
insurance companies exact very hard pen
alties from retiring members. How can il
be otherwise when it is distinctly stated that
this rebate of premium can be carried into
effect by "funds derived erraneously, the ac-
cretions Of trhich during The current gear alone
,cW be ample for the purpose intended" There
is manifest reason for surrender charge
in case of the giving up of policy by
member of mutual company. Equity may
require that this charge should be greater
than would seem just to an inexpert. Still,
there is demand at this time that policy.
holders shall not be wronged by surrender
charges, as misfortune is liable to compel
them to discontinue unwillingly the pay
ment of premiums. A new discussion of
the question of fair dealing in this matter
may now be opened.