Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1890-01-30

SrAsiL1r OF Lire Insurance.
The history Of the Union Mutual sets ss
rest. once and forever, the talk Of those
Who believe that life insurance IL not found
ed on . substantial and permanent basis.
This Company while disbursinS in the
time named (thifteen years. for matured
obligations larger sum in proportion to
its size than any other company, has paid
10 dividends TO policy holders, and added to
Its surplus during the same period the hand
some sum Of q .o49. 1855 oil, which repre-
sents the profit over all expenses and DIS
bursements for those years.
RECOGNITION or LIABILIrf.
As We remarked last year. it 10 the prac-
tice Of the Union Mutual TO treat ~ liabi-
lily all death-clsims Of which notices have
been received during the year, just as
fully a. il the papers we're fled. and the
elaine allowed. In the foregoing liabili-
ties the sum of ss,s76 81, unpaid. death
claims, il Of that nature.
MORTALITY EXPERIENCE.
As evidence Of the carefulnen Of the
company in the selection Of risks. we are
pleased to state that the mortality expe-
rience for 1883 has been Sl35. 1850 49,
within the tabie-rates Of expected deaths !;
as against s59, $50 81 for the year 1888.
The profit therefore Of the last two years
from this source alone makes the excellent
showing of sl97 SOLO.
DIviDEsps.
The dividend question in Life Insurance
Seems to be very little understood by poll
cy-holders. The basis Of all Life Insur-
BY Law. One Of the essential features is,
that certain portion Of each premium
paid into the company shall be laid aside
and accumulated at four per cent. COM
pound interest, so that by an accumulation
Of . reserve fund from the premiums paid
and interest earned. the premium charge
will not have to be increased.
Twelve or fifteen years ago six per cent.
city bonds sold below par and many Of
them are now selling at from twenty to sig
ty per cent. premium railroad bonds yield
ing seven AMI eight per cent. were selling
below par. and now sell III they have .
long time TO rum from fifteen to forty
eight per cent. premium, making the net
income realized from these bonds in many
cases less than four per cent. very few
first class railway bonds, and no first class
city bonds can now be purchased to pay =
rate of interest much above four per cent.
while bonds Of such cities ~ New York
and Boston sell at q price that yields the
investor two and three quarters to three
and three quarters per cent. per annum.
Only about twelve or fifteen years ago
mortgages could be placed in New York
at seven per cent, and in the West at from
nine to twelve per cent. whereas, now,
first-clsss mortgages in New York are
placed at four and one half per cent, and
in the West at from Ave to six per cent
generally.
In the case Of savings banks, this reduc.
ton Of interest would be felt by depositors
far differently from what it 10 by policy
holders Of Life Insurance Company. and
for this reason: Assuming that twelve Of
fifteen years ago Life Insurance Company
received on it's Western investments eigh,
per cent. and within year that rate val
reduced to seven per cent. then, ~ the In.
surance Company has TO lay aside four peI
cent. of this seven per cent. for reserve
the reduction of its dividend paying power
has been not one-eighth, but one-fourth
Then, if the next year interest dropped te
six per cent. the dividend paying of the
company would be reduced-not one fourth
but one-half. The next year, il the inter
est dropped to Ave per cent, the dividend
paying power Of the Company from prohti
from this source, would be reduced
three fOurths, not three-eights, - In the
case Of the savings bank, and the posi-
ton of the two institutions would b
thus. The savings bank would be able to
divide among its depositors five per cent
interest receipts, making it = round divi
dend Of FIVE per cent. upon the deposits
while the depositors in = life insurance
company, namely, the policy-holder, would
have the benefit Of the same Ave per cent.
but four per cent. Of it would 20 to the re-
serve fund and only the remaining one pei
cent be available for dividend paying pur
poses.
A reduction of two per cent. on interest
income from the above causes on the assets
of this company would amount to sl20, 000.
90, and that of itself would make near.
paid by our policy holders.
FUTURE BUSINESS.
As will be deduced from the foregoing
the policy of the present Administration still
points in the direction of maintaining the
internal affairs of the company in stric,
harmony with sound business principles
and that end being attained, it 10 intended
to apply future energies largely to the pro-
curement Of new business.
Such policy If pursued to its legitimate
conclusion must lead to increased business,
and a more favorable exhibit Of the Com
pany's affairs generally; in fact. the state.
ments herewith appended show how we'll
this principle has operated thus far, and
especially in the business done by the com.
pany in 1889.
The OUTLOOK.
Finally. the result of the past year Z
business 10 such a. to make the outlook
into 1890 most auspicious one
The increase of surplus augurs we'll for
the future, as does also the increase of in
come, policies and insurance in force.
The improved condition of our assets, Al
shown by the better returns from interest,
rents and other sources of income are all
proof Of careful management and conduce
greatly to the prosperity of the company
The favorable mortality experience, IL we
may Judge the future by the past. speaks
we'll for the character of the risks upon
our books; and the solution Of the univer-
sity problem has many favorable aspects,
inasmuch - il will serve to turn an incubus
Of expense into an early (ss We hope)
realization of income.
II has been come years since we have
been able to come before our policy hold
ers with record that has in it 90 many
agreeable elements. and we submit this re-
port knowing that every member of the
company will feel the pride we do in the
years work.
We believe that the record on its merits
deserves your unquali 1ed Enforcement, and
that the promise for the future bespeaks
for Us the hearty cooperation Of every
policy-holder in still further promoting the
prosperity of our company
Respectfully submitted.
JOSIAH II. DRuMMoxp,
JOHN r. DEWITT.
HENRY C. HCrcHIxs,
PERcIvAL BoNSkY.
MARQUIS +. KIse,
THoNAs A. Foster. Directors.
FRED. E. RICHARDS,
EDWARD A NoYEs,
FREDERICK RoRIE,
FRANK E. ALLEN,
JAMES YERKANcE,
January 24th, 1880.
The undersigned have this day examined
the Securities of the Union Mutual Life
Insurance Company 10 the vaults Of the
Portland Safe Deposit Company, and nnd
them ~ stated in the Schedule,
(Signed)
JOIN E. DEWrrr,
JOSIAH H. DRuMMosp. Finance
PERCIvAL BoxNEY, Committee
EDWARD A. NoYEs, and
FRRp E. RicHARps. Director.
FkANK E. ALLEN,