New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1878-09-25
THE MUTUAL LIFRS NEW MOVE.

,re oPFEp To NEW PoIICY-HoLDERs-THE ACTION
DECLARED RUINoUs BY OFFICERS OF OTHER
COMPANIES.
A reduction in premium rates on new nsur-
ance has been carried effect by the Mutual Life In
surauee Company of this city. The reduction ap-
plies only to the premiums Of the hrst Two
years of new policies or, rather 80 per cent
of the first two annual premiums VIII DO re-
turned to the holders of the policies. The adoption
of this course has created considerable excitement in IN
surance circles for the reason that the premium rates
are Identical the larger companies Oher companies
will be forced said adapt their business to the
new method either by q similar reduction or by other
inducements.
In relation TO the plan an officer of the Mutual Life
said yesterday This is not precisely reduction In
premium rates. About I'VE years ago the company de-
termned upon lowering its rates. but the action met with
so great opposition not only from other companies but
also from It's own poicyhoders who had risks In other
companies, that the scheme was abandoned IL was
urged then would be better for the company and
it's policy-hOders to accept a less rate OF premium
rather than large percentage In annual divi-
dends The same argument holds true to-day and it Is
thought preferable to offer the benefits to new nsur
anee bringing new blood into the company, rather than
TO scatter the in increased commissions to
agents The company is opposed to paying large COM
missions 10 soliciting agents and, in consequence
Of the larger aurements held out by other companies
80 per cent the business being done through these
agents. this company has suffered somewhat In the past
two years for lack of fresh Insurance. The plan adopted
purpose the attraction Of new business BY
II no harm or injustice Is done TO the present policy
holders for the 80 per cent allowance will be taken
from fund that has from charges made In the
purchase of policies. The company buys many policies
and in doing deducts the 10 the company OF get
ting another person In the formers place This fund Is
applied now TO Its proper and legitimate junction"
It was said yesterday by officer of another COM
pany that the adopted by the Mutual Life Insur
Company would be injurious TO all and still more
hurtfu TO itself Life Insurance" ne said, Is az
exact science aud the reduction may be demonstrated
easily to be impossible without violation OF the laws OF
the business.
The premium on $4,000 on an ordinary life at forty
years. Is 1918 OF this amount S136 SO must be held for
reserve commissions and other expenses will amount TO
S1O0 and the actual OF the insurance will be 7 &c.
To these add the 80 cent rebate tor the two
yearsfOr the second years percentage must be pro-
Yded IN the first years earnngs-and the outlay OF
the company Will be 1907 80 In excess OF the premium
received the policy Where will the money come
from Nowhere except from the accumulatons OF the
company, which belong to its present poicyho
The business will DO runous, and viii not
accomplish the objects sought 10 be gained. Other
companies win have TO meet the movement in some
way, and the smaller may be injured somewhat,
but the Mutual Life must feel severely the pressure OF
competition when t feels itself forced 10 adopt course
utterly variance with recognized principles OF life
insurance.