Mower County transcript. [volume] (Lansing, Minn.) 1868-1915, 1880-08-12

necessity and enough of Its methods t
have kept them proof against the temp
tations to abandon it when payments ma,
have been difficult There seems to b.
general, almost universal, tacit consen
that it Is good thing, necessity, ant
even a matter of course, that one shoult
have it; but this is coupled with so mucl
ignorance OF the principles that govern
its successful administration, that tn
general public has taken to the mos
wholesale experiments with Its methods
entirely on their own account
''ln what form do these experiment.
occur?"
I'm the form of friendly or co-opera
tive societies which adopt sort of pos
mortem contribution plan OF getting
money for the family of a deceased mem
Der, and call 1t insurance. The motive i
founded in a charitable impulse, and i
goo3, so far as it goes. The mischief i
in thinking it covers the whole ground
or that what i: offers is insurance.
"The family's need of protection is alb
solute. They are daily face to face will
the danger Of the most serious loss which
can befall them, and that danger will no
leave them until it does befall. The les
is only question Of time. That only il
worthy the name Of protection, of insur
ance, of indemnity, which is in itself alb
solute, invariable, always certainly ready
and remaining so until the loss come!
which it is to repair. That absolute, in
variable, ever ready, and enduring pro
lection is given by the unequivocal con
tract of well-Organized and wellman
aged life insurance company. Its policy
is for fixed sum, as g.eat as one chooses
TO pay for, based upon an adequate prem
ium, guarded by proper and sufficient re
serves. Aside from the contingencies tina
attach to all things human, there is NJ
question that when the loss occurs tn.
sum assured will he ready. This ha:
certainly been the case in a number Of
companies in this country for thirty-fivt
or forty years; and in England for ovel
hundred years; and the principles or
which the business IS organized aud con
Quoted are simple and unerring
"Now, this certain, absolute, invariable
ever ready, and enduring protection is
precisely what the cooperative or friend
ly societies do not and cannot give; fol
they start out discarding the only possible
basis on which contract for the certain
payment of fixed amount could be made
and, adopting the plan of postmorten1
contributions, they of necessity limit
their benefit to such contributions after
the death of a member as can be collected
from what members there may happen
to he, and which will always he varia.
BILE quantity. This is charity, If you
please, but it Is not insurance. 1t is en-.
tirely uncertain in amount, and has NO
intrinsic probability OF being in opera
ton at any given time in the future
There isn't one out of the tens Of thous.
ands that have been formed that has
lived ten years; very few have lived hall
that time"
"What has led to such general expert.
menting with these co.operatives
1.-TWO things: people have an idea that
1t is going to give insurance, and think
when they get a certificate that their fam.
lilies sLan't receive contributions for more
than certain sum, that it is contract
that they shall receive that sum. The
misapprchensiOn IN this respect is almost
incredible. Then, again, they think it
cheap. They are told that the death rate
won't be as high as the tables of the life
insurance companies predict, and the
payment will only be 81 or $1.1O when a
member dies, and it won't be felt, and
that the expenses will be small, and no re-
serves required. All which sounds very
we'll to q person who don't know that you
can't have thing without paying for it,
and what isn't paid tor won't be had.
This is just where the experiment lies
they have got TO learn that the death rate
predicted by the tables aciW happen, and
that unless the greatest care IN the selec-
ton of lives is exercised, a much higher
rate will happen; that the death-rate
makes the cost of insurance, and it is not
to be avoided or modified by CO cooperation
or any other form of association; they
have got to learn that as men grow older
they die faster, and that means increasing
contributions or else decreasing benefits,
neither of which will men stand. That
is precisely why real life insurance
in order to secure certainty
and psrmanency, charge level premium
that at first is higher than the cost Of in
surance, and, while 1t is so, reserves the
difference against the day when by in.
creased age and higher death. rate the cost
of insurance will be higher than the pre-
MUM. The fact was tested more than a
century ago that you couldn't hold men
together to pay increasing contributions.
These people have got to learn by expe-
rience that the scale of contributions they
make Cor whatever benefits are given by
their scheme are after all the mathemat-
ical and actual equivalent of the premi.
ums which lite insurance companies
charge, and from which they furnish the
reserves that make their contracts sure
and also that although equivalent, and
therefore just IS costly, they do not and
cannot furnish the slightest security; for
the money taken in as contributions ia
paid out at once, nothing is left, and if
contributions stop, there is no fund to
provide benefit for the families of those
who have been contributing, perhaps for
years.