The Kenosha telegraph. [volume] (Kenosha, Wis.) 1860-1888, 1880-05-06
COOPERATIVE LIFE INSURANCE.
A Western official Opiniou.

Hon. [. B. Needles, State Auditor
and insurance Commissioner for Illinois
speaks as follows upon the subject of as
sessment life Insurance.:
STATE OF ILLINOIS, AUDITORS OFF1oE(
SPRINGFIELD, April 90
In my Judgment cooperative life insurance
as offered by the various mutual-aid societies
now III operation, is unsound and fallacious. fuIl
OF errors, and sure to bring disappointment and
loss to those who trust to its protection.
When the benevolent feature is. attached to
secret societies and organizations in which there
are other and paramount interests to bind the
members together, it may no doubt be produc-
tive of great good in rendering assistance in
misfortune and relieving the families of de
ceased MEMBERS; but this cannot take place or
perform the Office of life insurance proper.
The independent cooperative societies, how
ever, do not possess even this element of CO.
heslon. They are money-lnaking concerns, in
tended to benefit their originators, officers and
managers, while their real object is disguised
under various benevolent and mutual-aid titles.
Ihen membership consists of persons who have
no community of interest. who are not ac-
qualnted with one another who are not actuated
by benevolent motives in joining or paying
assessments, but who are governed solely by
self-interest.
The bond of union is so weak that. should
the societies fail to fulfill the large promises
OF their agents, should the mortality increase
and the assessments multiply more ranidlv
than was anticipated, and the members find
that it did not pay to remain and there is no
loss attending withdrawal, they will drop out
IN large numbers. The indefniteness of the
contract, the misrepresentation and large
promises OF agents, and the uncertainty of
benefits In case of DEATH depending upon the
voluntary contributions of an uncertain num-
Der OF members, are productive of disSatisfac-
ton and disappointment. There are not the
benevolent considerations which exist in various
orders, societies and brotherhoods to hold the
members together, and these societies do not
have the Obligations of a definite mutual con-
tract, as III regular life insurance. companies. to
compensate them for Withdrawals.
The success of these societies cannot be pred
lcated upon the experience of few years. The
rate of mortality changes from year to wear
The average age of the members advances. and
cannot be offset by the accession of new mem
bers and, III consequence, the rate of mortal
lty Is certain to increase. The assessments
for death losses soon become a burden
which the members, disappointed in their
expectations of cheap insurance, will no
longer bear Those who are insurable will
withdraw and seek insurance elsewhere.
Those whose health has become impaired.
and who are no longer insurable, will be COM
PEELED to remain or forego the benefits of any
hlIu VI L1SlTduC0. Line result Is, Cl6 lnS0lV6I-
cy of the society, and irreparable loss TO those
who are most in need of insurance. Without
interest income, guarantee capital or accumu-
lated reserve, these associations cannot fulfill
their promises of cheap insurance and large
benefits. >
do not regard these associations as fit to be
compared in point of responsibility and hkeli-
hood of fulfilling their agreements with the
organizations founded upon the scientific ap-
plication of carefully-colected statistics, whose
ability to pay the last surviving policy holder
remains, should all the others withdraw.
l have no statistics to enable me to de
termine the relative cheapness of the two plans.
for when the element of certainty of benefits
is wanting, as in the case of cooperative life
insurance, it is valueless, and consider it dear
at any price.
cannot see wherein there is less oppor-
tunity for dishonest management in this sys-
tenn than in that of regular life insurance,
while / believe, as a fact, they have been
managed with less honesty.
T. B. NEEDLES. Auditor, etc