Omaha daily bee., 1891-02-08
AN INTERESTING TREATISE.
On a Question Of Vital Importance to all
Citizens.
A FACTOR M,1FlNANClAL DEPRESsloNs
Old Line Life Insurance I'm all it's
Phases-Facts and Figures
in Redundant Guam
.rul e titles.

Editor OMAHA DAILY BEE: AS a subscriber
OF your valued journal aud as acitizen OF
this commonwealth permit me to thank you
! Tor the publication Of the article In your issue
Feature OF Life Insurance Policies" Ii is
| really refreshing to note that said article was
contrlbuted by no less an authority than the
| renowned Jacob L. Greene president of that
| famous institution the Connecticut Mutual
a,nsr l,e ifnsIranGS fnr biC compa 1t IS also % E19a
newspaper like The BEE devotes so much OF
| rs valuable space to life insurance interests
| Whyr Because SO many imagine 1t a subject
| dry and meaningless except to life insurance
actuaries and agents But such an impression
error That there are intricate mt sa
Insurance. as Mr.. Greene dubs investment
| policies, bonds" "consols," etc, there can
De no dispute, yet that there should be any
mystery or misunderstanding In the minds OF
people OF even ordinary intelligence as to the
| system ana operatiou of straight legltlmate
IRE Insurance Is mystery of my ysterles. ana
| there would be none were II not thu { solicitors
700 OFTEN resort to mystifying statements IN
order 10 cover III the defects In the plans or
their respective Companies
~ is substantial factor I'm the growing In
telliUeuce OF business men to note that at no
period OF our commercial existence have they
taken the decided interest in life insurance
that they do today. This is as 1t should be.
| can secure SO thoroughly and practically an
elhcent competency.to mans family upon
so SO small an annual outlay as a sound, reliable
IRE insurance company Is enabled to
grant Owing to the numerous safe.
guard surrounding the interests OF
CORPORATIONS, by state legislative enuctments,
IL Is fair to assert excluding certain co-opera-
tive and assessment associations that busi-
| ness man cannot err in patronizing the duly
chartered life insurance com panies and asso-
clations OF this country, 50 far as their aDiity
the conditions stipulated and named in each
policy or certificate OF straight life insurance.
wherein, then, do business men need to eXer-
else precautlon to ascertain whether they are
contributing too much money for the COM
potency named2
CAN THE PREMIUMS BE REDUCED
which level or old line life insurance com
panies charge their policy holders, and yet
fully guard and protect the perpetuity of
policy holder in these United States, and in
deed, to the body polite of the whole country.
FOR q long period of time those level or So
business of life underwriting, and at premium
rates; absolutely prohgate in character II
not so. how could they have maintained such
enormously expensive establishments with
presidents many OF whom receive more salary
per annum than the president OF the United
states. Would you, sir have few facts and
figures for your consideration and that of your
readers? Selecting limited number OF those
old line or level premium life insurance COM
panies, it will be found that in a few years
they have collected from their policy holders
the fabulous sum OF over @OO,OolOO0 over and
above the amount necessary for annual
the case that t at Ssdi certain ,o periods
contraction of the money market, may
not this system be a most potent factor in
superinducing such depressions.
INTHE YEAR 1889
twenty-six OF these "old line life insurance
companies did business in Nebraska. They
collected from citizens OF the state thefr
nearly three quarters OF million dollars, vas
sent out of Nebraska and into most of the
Atlnntic states. natural question would be.
what percentage OF this sum was paid back
into the state. TO tho estate and dcvsees of
the policy holders OF said twenty-six level
in ap pNlI lnl. mi.
showing that the premium they collected and
took away from IL Nebraska !, exceeded tn the death
single year Is it then not high time for our
business men to wake up and investigate this
huge financial monster, working its victims
under the guise Of protecting the widow and
bread winner? The Hon. John X. Tarbox, ,lato
Insurance commissioners of the state of
MASSACHUSETTS,: gentleman of large financial
experience and an actuary of distinguished
prominence, Insa mas apply ana truly said; rn,o,
States are insured in the old style life insur-
ance companies today than in 1870, aud yet we
then, and all the while the advantages of life
insurance have been urged upon the people,
numerous army of skilled and able advocates
strumentaiities of public Influence, The peo-
the fact that within n few years, and with
scarcely an effort, voluntary associations for
life Insurance have organized through
d membership largely in excess Of
he thet tns
to be under proper administration and laws.
has failed to win the confidence and satisfy
''If that plan OF insurance is to hold the field
in the future it must adjust itself to modern
conditions
THE conclusion is that the accumulation
OF a life company. by eXacto from Its policy
holders, of fund incapable of ultimate DIS
tributlon to the persons whose contributions
create 1t, In excess of the ar cunt which the
law, the principles of the system and the his
tory OF every we'll ordered institution of life
insurance In the country avouch as sufficient
to assure the full accomplishment of its con-
tracts, is not justified by any prudent reason,
and Is an injustice TO the insured public the
law should redress.
"Such surplus serves no legitimate use,
and Is a perpetual temptation to wasteful-
ness. specu cuation and corruption in the man
agement OF the corporation"
So 1t will be seen that the able TarboN could
see, no good or wise purpose in taking from
policy holders sums so largely In excess of alb.
sonte needs .so aSo What vii ultimately becomeof
now held by old line companies In this coun-
try alone? Who contributed this money! To
whom does it rightfully belong? Are policy
holders who read this article willing to have
their payments thereto conhscatei to poster
ity and pass into the hands of strangers?
But you ask. sir, what there Is better to offer
President, Jacob L. Greene in his ar
unfavorably spoken OF by this contributor
Mr.. Greene condemns investment and specu-
latlNe lie insurance. IhIS Wrlter also CASTS
his vote against such insurance as being
most dangerous to policy holders, holding
contracts predicated upon such methods be-
cause of such system being permeated with
mercenary motlvcs of Il most pcrniciOus char
acter. But while the undersigned Is not
backward in denouncing investment and
speculative lfc insurance, he is also strongly
opposed to the system established by level
prem ium or so-caled old line life insurance
companies. not alone for the unnecessary eX-
travagance OF the system, but the falacy OF
It's excessive reserve element. Bear In mind
my language "eXcusSlye reserve element" this
at once admits that the writer realizes the
necessity of some RESERVE" Most certainly,
because the foundation of all legitimate life
insurance, must and does provide for an ade-
quates provision against the increasing risk
year by year owing to the advance In are of
the mem bcrship, and without some reserve,
call it by whatever tnme you Will whether
surplus fund" ''emergency, fund, "lndem-
nifty or .guarentee fund the principle, use
and need for such fund in life INSURANCE. Is
none the less patent and requisite, Indeed per-
petual prosperity Is not possible without such
n fund. In the earlier years of the so-called
level premium or old Inc life insurance COM
panies they established a system of loading"
or adding 10 the natural premium (by which
latter Is meant the sum necessary to pay cur
rent death losses year by year large per
centage for what they then and since called
reserve" Lbstanding experience has
'loading" for reserve is too large, and quite
burdensomc for the policy holders. yet they
cling to the system. with all the tenacity of
uIt \ aunIn frntt ba Hon. VAh