New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1891-11-24

benefit out OF o.hcr part that one part NAV get ~ W.
sursnce ut than its cost to the c"npnn! W III
other mart aylna much more than To tails End thvy
lopoae all dividends for IcriCd5 Of ten, reen or twcn
years. the expectation that thereby The dsid WI"
be made much larger than by thc mfrs aeeu"o'" VI "
terest during those periods
The theory Of the speculation that during those
era periods OF postponed dividends many peoas who have
paid In anywhere from one TO nineteen premiums VIII oc
compelled lapse their policies, leaving WIN the COM
panes their and oil the o'epayments anu owner
surplus which have been accommodating while their poll!
cies were In also that those who die during these
periods and have kept their policies In force so that the
companies pay the face OF the poiicies VIII nave
large amounts OF oyerpayments and surplus which VIII
no left with the companies They calculate that In twenty
years at least Of every 900 Will have died or
lspsed.
So the plan is to forfeit to the Tontinc pool all the
or surplus both those who die and those
who lapse and such part OF the reserves OF those
who lapse Is not called for under their rule.
II man calls for padup policy within six
months after he lapscs he thus gets back the value OF
portion Of his reserve but loses all the surplus he has
earned II he doesn't cali for within that Time he loses
the whcle The cd Tontnes take the whole, both re-
and surplus.
So the pool made up Of all the dividends or ovcrpay
who die and Of those who lapse and from
onehrd to whole OF the Of those who lapse
And this is called Investment insurance"
Each man bets all his oyerpaymens and other surplus
and all or considerable part Of whatever he con-
tribute to and the paidup insurance it Will
buy he viii both live and pay oil his premiums during
the period.
Two points obvious: those who die and those who
lapse will have paid their while IN
than 10 has cost the company to carry them by
the Of surplus and reserve which they for
the pool and those who live and through their
respective periods viii have had their insurance at Just
much less than has cost to carry them as the sur
plus and forfeited by the former class exceed the
surplus properly earned their payments. II the
theory Of the scheme is in degree realized the unucky
will pay excessively and the lucky will be greatly
fna1 ia foanH
ance it the certain full and complete protection
life insurance each mans family which his own
premiums have paid for and at just his own Individual
cost 10 the company
yet three OF the four greet Tontne 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 ms
Equitable Is stock company. but flies % mutual nag in
soliciting. The New.York Life and Equitable began
the speculation twenty but late as 1882 the
Mutual Life said OF Itself but it does not issue Tontine
policies one to engage In the Tontne
game. The principle Of the game Is to rob The un-
fortunate by csnceng their policies without consideration
when II is fund impossible to raise the money for
premiums and the object Of the game is alleged TO be the
opportun Tor companies whici ply very snai divi-
bends conceal the met for term OF wears called Ton.
tine Period We advice man to beware OF any
company which engages in the Tontine game" But in
1885, the Mutual Life engaged in the Tontine game and
presses It with remarkable vigor.
Evidently 1t is game for rich men only the PROFITS
poor TO carry the load
THE ESTIMATES.
The nducemcnt TO the speculation presented by est
mates illustrations" of what the dividends may posi-
bly, be- II one lives and PAYS through the period Of post
loneiuent saying nothing OF Of what he will lose
hv dying lapsing. And these estimates" etc., are
by statement thai they 10 not exceed the
setual settlements now being made Tontne policies
ten. feen and twenty years The argument
that II those policies yield present results then equal
results be looked for ten fifteen. or twenty years
hence.
DECEPTION PRACTISED IN PRESENT ESTIMATES. |
Two great carefully concealed from the public
present settlements Of former Tontne policies
their estimates illustrations for those
issued:
Ist The present settlements Of surplus "rcsuts
the Tonne policies issued ten fifteen, and twenty years
ago oaly from 45 to SCH per cent Of the Estimates"
surplus which then induced to take them
The speculation has literally not turned out half as well
It represented.
For instance the man who fifteen years ago. was
induced take 10000 policy Oh estimate OF a. 03j
cash surplus end Of the fifteen period gets
only ~ O9i10 surplus which is also the present estimate
like policy issued with dividends postponed until
Fifteen hence the reduction from estimate 10 result
Exc policy with twentyycar period is from 49,
20 S4e75.70, which last sum Is used as esti
mate for the twenty-yeor period
o. These 'results'' former Tontne policies, dsaD
POINTING they are an entirely different thing from
the 'results" Tontines consols," bonds" other
like schemes being issued and for which the former
ar, nos used estimates aud illustrations"
The Tontlncs now being sentsd are no. the Tonncs
and consols now being swd, and the use Of the settle
ment OF the former ILLUSTRATION OF the latter IS
entirely misleading.
The TontInes now being settled arr FtU Tontincs that
is person pslng forfeited no, only all his dividends but
his entire reserve.
The Tcn;incs consos and bonds. ETC.. being rs
sued reality what called smiTonnes; that is
person lapsng though fong all his accrued dividends
supposed forfeit his entire reserve but only part
Of it. These forfeited reserves are the backbone OF the
Tontine pool. To pool containing full forfeures
Of them illustration OF one to contain say only one
third OF them, is performance each can characterize for
himself.
And II Fun Tontlne results only one.balf the est
mated surplus how near to that same result now used
as estimate, a Tontne policy be expected to
THE EXPENSE OF ToNTINE.
The attraction OF the Tontine policies. bonds consols
being the profits expected from ofeltures 1t follows
that forcures will be cultivated that the managers Will
reach ont after oil the foreItabe material possible The
the volume OF buneas and the higher the premiums
peooe be got to pay for It, and tho more 1t is forced
the greater the number that be induced to take
chance In 1.-THE game" and the higher each be
made to behe the number OF probable forfeiturs
and the greater the profits from them.
Two things would naturally follow from that these
panies would adopt very high premium plans with very
plausible features apparently overbalanee the premiums
anything could be worth than II cossand would
pay commissions that would enable them to employ vast
body OF agents TO promote 1.-THE game"
And precisely these two things have followed. These
companies taxed actuarial ingenuity presen.
plans with features OF apparent extraordinary advantage
all in fact fully covered by the novel and high pre-
mum cergedas they could give anything at less than
its cost-and each calculated furnish much profit
possible In of death or lapse.
And they have put w commissions and inducements"
agents point that few years ago would have been
considered Of trouble, and would be today
the Tanne surplus just available for expenses
as IL Is for dividends twenty years hence
They have covered the world with agents selling. not
tffs
and '1ustrations OF the many forms OF 1.-THE Tontinc
eame' And they getting innow OF new
business, which they toass OF and strive for the sole
substance and evidence OF Hut the truth U.s.
they compelled 20 get great volume OF business