The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1891-11-27
insurance they can possibly get; and all
Ahox- 49, loH-zo : ali 4col affla

truly and thoroughly fuliills the promise of
mutually, when he is unable, or no longer
needs. to carry his policy, the company
will no longer need for that purpose what
he bad been from year to year contribut-
ing to the reserve. and his share of or con-
trlbution to the reserve will then be used
as a single premium for a paid-up policy
for such amount as 1t ought to buy with
full regard to the principles of mutuality.
Then. in any case, whether he goes on or
stops. and whether be stops from choice or
necessity. he Will receive in some form of
policy all the insurance he has paid for, and
the company will receive It's full pay for
all the insurance it gives.
That briefly but completely describes
legitimate life insurance on the mutual
plan, administered exactly according to
the several elements entering into the
transaction and fully satisfying each one
OF them. And by Legitimate life Insur-
ance" We mean life insurance regarded as q
service to the communicable insurance
for family protection, which is the only
service it can render. just as fire insurance
can serve only for property protection.
Life insurance protects the family or an
estate from the loss of the money value of
It's head, or a creditor from the loss of the
life of his debtor, and fire insurance pro-
tects an owner against the loss of the money
value of his property, or a creditor from
the loss of the value of the property secur-
ing his debt. The only difference between
life and fire insurance is the thing insured.
Who would think of making q speculation
of his fire insurance or going into it as an
Investment" operation?
ToNTINE OR INVESTMENT POLICIES AND
BONDS.
As against the simple. clear. straight
forward way of Offering life insurance as
protection. and giving each policy-holder
all of that protection which he pays for. at
just what each costs the company year by
year. and making that cost as small as pos
sible by economy and careful management,
the Tontine companies set their policy
holders to specializing with each other.
on the chance that one part of them may
get an extraordinary and otherwise impos-
sible benefit ont of the other part: that one
part may get its insurance at much less
than its cost to the company by the other
part paying much more than cost. To this
end they postpone all dividends for periods
of ten. fifteen, or twenty years. on the ex-
| pectation that thereby the dividends will
be made much larger than by the mere &C.
emulation of interest durin q those periods.
The theory of the speculation is that
during those several periods of postponed
dividends many persons who have paid In
anywhere from one to nineteen premiums
will be compelled to lapse their policies,
leaving with the companies their reserves
and all the overpayments and other sur
| plus which have been accommodating while
their policies were in force; also, that
those who die during these periods and
have kept their policies in force SO that
the companies must pay the face of the
policies. will have large amounts of over
payments and surplus. which will be left
with the companies. They calculate that
in twenty years. at least, $50 ont of every
1000 will nave died or lapsed.
So tho plan is to forfeit to the Tontine
pool all the overpayments or surplus of
both those who die and those who lapse,
and such part of the reserves of those who
lapse as is not called for under their rule.
If a man calls for a paid-up policy within
six months after he lapses. he thus gets
back the value of q portion of his reserve.
but looses all the surplus no has earned; if
he doesn't call for it within that time, he
loses tho whole. The old Tontines take
the whole, both reserve ana surplus.
So the pool is made up of all the dividends
OF overpayments of those who die and of
those who lapse and from one-third TO the
whole of the reserves of those who lapse.
And this is called Investment Insurance."
Each man bets all his overpayments and
other surplus aud all or q considerable part
of whatever he may contribute to tie re-
serves and the paid-up insurance 1t will
buy that he will both live and pay all his
premiums during the period.
Two points are obvious: those who die
and those who lapse will have paid for
their insurance while it was in force more
than it has cost the ompan to carry them
by just the amount of surplus and reserve
which they forfeit to tho pool, and those
who live and pay through their respective
periods will have had their insurance at
just so much less than it has cost to carry
them as the surplus and reserves forfeited
by the former class exceed the surplus
properly earned on their own payments. If
the theory of the scheme is in any degree
realized, tho unlucky class will pay ex-
cessively and the lucky will be greatly
favored. WnateVer THIS ID, lt 10 not mutual
life insurance.; it is not the certain, full and
complete protection of life insurance to
each mans own family which his own pre-
miums have paid for. and at just his own
individual cost to the company.
And yet three of the four great Tontine
companies, the Mutual Life. the New-York
Life and the Northwestern Mutual, are, by
charter and organization. purely mutual
companies, founded to treat all exactly
alike. The Equitable is a stock company.
but flies q mutual flag In soliciting. The
New York Life and Equitable began the
speculation twenty years ago. but as late as
1882 the Mutual life said of itself: But it
does not issue Tontine policies nor encourage
one to engage In the Tontine game. The
principle of the game Is to rob the unfortu-
nate by canceling their policies without
consideration, when it is found impossible
to raise the money for premiums; and the
object of the game is alleged to be the op-
portunity for companies which pay very
small dividends to conceal the fact for q
term of years called q 'Tontine Period
We advise every man to beware of any
company which engages in the Tontine
game" But in 1884 the Mutual Life en-
gagged in 1.-The Tontine game" ard now