The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1891-11-27

not turned ont half as well as it was rep
resented.
For instance. the man who. fifteen years
ago. was induced to take a $40. OOO policy on
an estimate of S4,f55 cash surplus at the end
of the ffteen-year period gets now only
S2,094. 20 surplus. which is also the present
estimate on a like policy now issued with
dividends postponed until fifteen years
hence; the reduction from stimat to re-
suit on q like policy with a twenty-year
period is from $3.50 to s4,975.7 20. which last
sum is now used as an estimate for the next
twenty-year period.
Cd. These results on former Tontine
20 licies, disappointing as they are. are an
entirely different thing from the results"
on TontiDes, "consols," bonds" or other
like schemes now being issued and for
which the former are now used as "esti-
mates" and illustrations"
The Tontines now being settled are not
the Tontines aud consols now being issued,
and the use of the settlement of the former
as an illustration" of the Inter is entirely
misleading.
The Tontines now being settled are full
TOntines; that is. q person lansing forfeited
not only all his dividends. but his entire re-
serve.
The Tontines, consols. and bonds. &C.,
now being issued are in reality what's are
called semi-Tonrines: that is, q person laps
ing, though FORGETTING oil his accrued
dividends, is supposed not to forfeit his en-
tire reserve, but only n part of it. These
forfeited reserves are the backbone OF the
1 TN4utia woI IT, IN ~on1 nnrfnip,r or
full forfeitures of them as an illustration
of one to contain. say only one-third of
them, is a performance each can character
ize for himself.
And if Full Tontine results in only ono
half the estimated" surplus. how near to
that same result. now used as an "estl-
mate" can a semi-tontine policy be ex-
pected to comet
THE f OF ToNTINE.
The attraction of the Tontine policies,
bonds. c%onsOls. &C., being the profits ex-
pected from f~orfeitures, it follows that for
FIXTURES will be cultivated; that the manag-
ers will reach out after ell the forfeitable
material possible. The greater the volume
of business and the higher the premiums
people can be got to pay for 1t. and the
more it Is forced-the greater the number
that can be induced to take q chance in
1.-The game" and the higher each one can be
made TO bet-the greater the number of
probable forfeitures and the greater the
profits from them.
Two things would naturally follow from
that: these companies would adopt very
high premium plans, with very plausible
features to apparently overbalance the
premiums-as if anything could be worth
more than 1t costs-and would pay COM
missions that would enable them to employ
q vast body of agents to promote 1.-The
game"
And precisely these two things have fol-
lowed. These companies have taxed
actuarial ingenuity TO present novel plans,
with features of apparent extraordinary
advantage. but all. in fact, fully covered
by the novel and high premiums charged
as If they could give anything at less than
its cost-and each calculated to furnish as
much profit as possible in case of death OF
lapse.
And they have put up commissions and
inducements" to agents to a point that O
few years ago would have been considered
a menace of trouble. and would be to-day
were not the Tontine surplus just as avail
able for expense now as it is for dividends
twenty years hence.
They have covered the world with agents
selling. not pure life insurance as a simple
protection, but Estimates" and 'illnstra-
ton" of the many forms of "the Tontlne
game" And they are getting an enormous
inflow Of new business, which they boast
of and strive for as the sole substance and
evidence of success. But the truth is, they
are compelled to get q great volume OF now
business constantly in order to get the for.
FIXTURES required by the Tontine scheme.
The thing depends for its success on an
enormous inflow and an enormous outflow;
they have made the inflow very expensive,
but they have got it for the present; the
profit is in the outflow and what it leaves.
They are getting that, too. Several O:
these companies ave in fiveyears marked
of" more. by many millions, than they had
in force five years ago. The great inflow
must be kept up, no matter by what device
nor at what ex pense, in order that the great
outflow with Its rich forfeitures may not
cease. Plenty of grist must be had for the
forfeiture mill.
But the expenses ere gaining on the
profits. as Is evidenced by tho steady
shrinkage in Tontine dividends, and the
difficulties of keeping the ''new business
far enough ahead of deaths, lapses, and
~surrenders increase every year. During the
last five years the great TontIne companies
have made an average increase In their ex'
pense account of nearly 20 per cent. oil
itself, and over 3 per cent. of the premium
and interest income, until now their eX'
penses of management average over 20 pei
cent. of their gross income; over $50 out OF
every 500 IN premiums and interest alike
goes for expenses. How can a business with
such an expense make IAN investment" ex
cept through q speculation in which some.
body has got to lose a good dealt
It is not strange that they seek to diver,
attention from their expense account by
comparing it with new business" OIL
amount at risk" or, indeed. with any Sc,
Of figures rather than with the income &C.
count out OF which expenses as we'll q.
losses and dividends must come. There
are but one hundred cents IN a dollar: ant
If twenty are taken for expenses only
eighty will remain for other purposes
And finding the ratio of the twenty cent.
to something else than the dollar out OF
which it comes won't help anything. l,
doesn't restore anything for either losses OF
dividends,