The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1883-10-29
Profits from Life Insurance in Regular
and Assessment Companies.
Something About the Operations of the
Last Named Under the Act Passed
by the Late Legislature.
Official Figures Showing Their Insur-
ance Is Mostly o Old People.
An Astonishing Exhibit Made by the Au-
ditor of State-Where the Law Is
Deficient and Weak.

There is probably no State in the Union which
Is being preyed uDon more by questionable in
surauce companies than Indiana. The people
are afforded little protection against imposition,
and a tax fully half as large as that paid to the
State is collected annually in Indiana by the IT.
responsible companies operating upon the
mutual assessment plan. Little is known
by the public of what, to draw the char
acterization mildly, may be called the I'M
reliable system of business, az it is
conducted in Indiana. There may be some
Trustworthy and reliable companies among the
number that are doing business in the State, but
the statistics to be gathered from the forthcom-
ing report of the Auditor of State indicate a
condition which is likely TO cause the whole sys-
tenn of mutual-assessment life insurance to be
regarded with distrust.
THE LIFE-INsURANCE BUSINESS.
The problem of life insurance in it's different
phases, financially and morally, is a perplexing
one. 'Now you see it, and now you don't" 1t
has the face of a good thing, but to the
eye of the public generally the secret of
its life is hidden. Acting upon the same i'm
pulses which usually guide man in other matters
of life the fair looks of the thing wins his patron
age, and as long as the outward appearances
seem well he is satisfied. If the outside work
ings are ever revealed to him 1t is after the life
of the thing has ceased. Nothing could be more
harmless or beneficial in the way of a public
trust than life insurance, conducted on safe
principles, hut the trust has grown to proper
tions which call for upright and able men In its
management. 1t is shown by statisties that IN
this country there are So, 100000 900 OF insur-
ance on the lives of 100000 persons. Elizur
Wright, in a work entitled .'Traps Baited with
Orphans" says that ''thereq are in this country
more than half a million families who have vol
unfairly subjected themselves to "a tax amount
ing in the aggregate to about S~100,o00,000 a
yeas, and are under bonds, mOra-O or less, in the
aggregate amount of about S400, 600, 600 TO con-
time to pay this tax ferlife or for a long period"
The amount now at risk IN the American inSur-
ance com panies is more than one-twelfth OF the
entire capital wealth of the Union. 1t ia shown
that of all the life INSURANCE companies in
that survives, while not one of the
surviving large companies has yet reached
heavy pressure from death claims might be ex-
pccted." The large Inajorities of policies are
eonfiscated for non-payment and it is said that
"of every ten policies that cease, but one will
cease by death and expiTg." The average dura-
tion of an American policy is only about seven
years.
THE POLICY HOLDERS BENEFITS.
Even in what is regarded as the legitimate
Iife-insurance business the policy-holder is taxed
exorbitantly-more than the return which he is
assured. 1t is estimated that the people of
America are paying ope-ninth of the entire
wealth of the nation to life. insurance people.
What is the average per cent. on the invest
ment that the policy-holder gets backF' asked a
journal reporter OF the general manager of one
OF the life insurance companies operating In this
State.
'HHe gets back only a small part of the invest.
ment," was the re ply.
But how much2"
'He doesn't get back more than 80 per cent"
What becomes of the rest2"
ut is used to pay the expenses of maintain
ing the company-the salaries of the officers, the
agents, office expenses, and so forth"
The tendency has been to favor the assessment
the policy holder and the company. but from the
developments in the form of statistics. the
equity, to use a trite but applicable expression,
consists OF SIX of one and half q
dozen OF the other" In addition to
the exOrbitant profits which are realized,
the possibilities of fraud IN the assessment sys-
TEN are almost without limit.
THE INDIANA COMPANIES.
There are twenty life insurance companies
operating i'll Indiana upon the mutual aid sys-
tern. according TO the reports filed with the Au-
ditor OF State. Under the act passed by the last
General Assembly, regulating the assessment
companies, a charter cannot be granted without
there are 100 persons all insured for an amount
not less than 5000, 600. The policies or certiti-
Gates of insurance are exempt from the val
nauon based upon the American
OF mortality. They are required to make an an-
nual statement to the Auditor of State before
the 3lst of August answering such questions as
may be asked regarding their business. Four
teen OF the twenty companies which have been
quirement, and from these reports, which have
been tabulated for the Auditors forthcoming
annual report, the following statement of the
business and risks of the different companies is