Washington standard. [volume] (Olympia, Wash. Territory) 1860-1921, 1883-04-20
Life Insurance.

Now and then we lind 4 journal which
ha> the independence I" discuss The III"
insurance problem ~ It j. presented 10y tlr
practical operations OF the companies AMI
associations which have II under their
control. But the instances are rare. Tie
nrrsS seems to he suhurncd and >ilcuccd
lv the few picked honc~ that are occas-
ionalv thrown in IL way and III" hop" 81
further patronage Is III" palr"hl" tra"i
gather, in strength and arguments the
necessity for silence. if favorable comment
he denied Southern Industries. the
ahlcSt and most successful of American
agricultural publications, l. however. one
of the exceptions. 1t cites II, an illI>tra
ton, the growth Of Il single company-tllc
Euuitablc-which was started twenty
wears ago with a capital of 500, 900 1t
now owns a gorgeous palace on Broad
way. Ii supports an army of officers on
salaries many of them greater than that
of the President of the United States.
And vet, lotteries are interdicted. and
very properly, while these greedy cormor-
ants are licensed to stalk through the land.
filling their nets with innocent and de
ludcd victims. Legislation shuts the door
in the face of lotteries, and protects the
people from their WRONGS, and yet permits
these greater outrages and holder robbers
to carry off the hard earnings of the poor
and needy"
So much by way of quotation. Now we
affirm tearlessly, that any system which
Yields such an immoderatc revenue is
founded upon unsound principles. 1t is
in excess of the risk involved and the
labor necessarily performed, in conducting
the business of the organization. Besides
the palaces on Broadway and the prncely
salaries paid their occupants, who fare
sumptuously every day and are clad in fine
linen, the percentage paid to the army Of
agents and canvassers, whose compensa-
ton averages often from 20 to % per cent,
is in itself an enormous tax, every cent of
which enhances the rates of the assured.
1t has been urged, in justification of the
large salaries, that it would remove the
main incentive for dishonest practices and
thereby constitute the most potent safe
guard of the important trust confided to
them. This view is not fully supported
by facts. When we contemplate the in
satiable avarice manifested on every hand,
and consider the opportunity for fraud
which is admitted by the premises, it seems
evident that the excess, over and above a
fair compensation is just so much blood
money, nine-tenths of which is wrung
from the lower classes, under gross
preversion of facts and total misunder-
standing of the operations of the system.
A two-fold object may be discovered in
placing the rates high. 1t affords, of
course. a larger revenue while the victim
pays, and surer probability that he will
allow his policy to lapse before the expir-
alton of the period allotted as the probable
duration of life. The lapsing of policies
after several annual payments have been
made, constitutes the greatest source of
profit of life companies. Statistics of the
business show that but three in ten risks
are ever paid, demonstrating beyond ques-
ton that seven-tenths of the patrons of
the system assume load they afterwards,
from ono cause or another, relinquish.
The profits on this proportion of the bust
ness are absolute, but they in no wise tend
to reduce the cost of insurance on the
three policies which mature, whose holders
pay rate, on the average probability of
life, which invested at the lowest rate Of
interest, rolls up excessive profits. TOprove
this, take the single life payment in New
York Mutual on $1,000 at the age of 40,
which is $445 So, and compute its value
at 4 per cent. per annum, compromising
annually, for the period of 20 years. Or
take any other rate and see if it will
figure up any different results.
Nor can we turn to the organizations
which have lately sprung up based upon
the assessment principle for relief. The
results claimed by their institutors and
advocates, have not been tested by exper-
fence. 1t seems to afford insurance at the
minimum rate, and doubtless is cheap
enough at the outset, but if all its affairs
are honestly conducted, the unpleasant
fact is apparent that as its membership
grows older the deathr rate increases. The
individual insured with the Workman with
their $4,000 members, or the Legion OF
Honor, with its 10000, is liable to pay an
assessment on $4,000 or 10000 persons il
he lives 30 years.
Now the question is presented: Is it
wise for person, in the prime Of life to
carry even moderate policy in any regu-
larly organized company or in either of
the various societies, when the means of
rapid accumulation are afforded in the
many absolutely safe opportunities for in
vestment The writer believes it can only
be answered in the negative, and that a
careful investigation Of the subject, which
is but partially presented in this article,
will amply sustain that opinion.
How it Works.
Hon. John c. Blanchard, of Michigan