The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-02-18

less like increase will be made in the
dividends on policies renewing In 1885,
SURPLUS.
Notwithstanding the large dividends paid
in 1894. the surplus held increased from
se,4iS,o27S7 JAM /, 1894. to ssS76.212.7S Jan. !.
1895, gain of s42s, 1s4sl. But s2s2, $3.50 OF
this was due to the increase in the market
values of stocks and bonds over those OF
the previous year, leaving gain TO surplus
of si66,5e6.11 from the actual operations OF
the year.
Out OF this surplus must ultimately come
the difference between the par ana market
values of our bonds il they are held 10 ma
turity.- For the rest ii protects the assets
and the business against unforeseen loss
and disaster. and aids materially IN earn earn,
steady, while each maturing policy as IL
retires from the company receives its APP
portioned share.
Our surplus would be over $l,oOo,Oo0
larger than we count it if we tested our
own strength by the legal standard used by
the State departments and by other com,
panies. Computed by them our surplus Wouio
NEW BUSINESS.
We have steadily adhered to our time-hon-
ored business of seeking only such good,
safe business, in the healthy parts or our
own country only, as could be had without
increasing our expenses and so increasing
the cost of insurance. So great stress mas
been laid by certain companies, laDorlns IN
der certain necessities or their own ere.aoi s
on the imperative need of great volume Oh
new business every year. ana they - VIZ
lently critcise those who do not follow their
lead, that not few managers regard tneui-
selves justified in meeting hard times with
great expenditure rather than allow Iaii.
ing off in amount OF risk An appearante a,, or
cost to the policy holders. DIVIDENDS must
not stand in the way.
The Connecticut Mutual is so large and its
business so stable that it does not need to
make size or growth matter of other than
secondary Importance. Its first aim Is 10
make it's policies secure; its second, to make
them cost as little as possible through econ
omy and prudence; and then. from SUCH
business as a low rate of expense VIII secure
without making us cut policy holders divi,
dends, it takes on growth in easy times ana
in hard times it takes it or not, as may hap
pen. Cost to the present members Is SO vltai
a matter in life insurance that, TO our view,
If that element be properly taken care OF the
matter of growth is not thing 10 De
anxious about. 1t will take care of itself in
the sense that it needs no sacrifice pr eX-
listing interests.
OUR EXPENSE ACCOUNT
in 1894 was only 9.94 per cent. of the income.
ratio materially less than that of any COM
petitor, and much less than half that of the
most pushing companies.
The cost of our insurance is corresponding.
ly less than in those companies. The cost or
our insurance is and for long time has
been decreasing each year; the cost OF theirs
Is ana Tor d long time mas DetIl lucTedSiHS.
COMPETITION.
The Tontine schemes of one sort or an
other In use by so many companies require
extraordinary profits to make the extraor-
binary dividends promised in but post
poned to the future. These profits are to
come from forfeitures. and a great many
are needed, for large amounts. for the sue
cess Of the plan great new business a sss to
to be the central idea and aim of the
scheme. 1t is the one end to which every
be kept ahead of the forfeitures. This
makes competition exceedingly sharp.
For example, one New York company
wrote in 1894 the enormous amount of $780,
100000 and over in new business. But 1t
also had lapsed and surrendered, besides
its death losses and endowments of about
$40, 900 000 the great sum of $156 000, 900;
over 20 per cent. of what it had in force
at the beginning of the year. Several other
companies are striving to Guido II possible
or at least equal this one. It's expense ac-
count is % per cent OF its income and has
been as high as that Tor many years. It's
rivals are not behind in liberality of plan
or expenditure. 1t is useless to look for
honest, legitimate competition-an examtna-
tiSn Of real meritTnaer suen con conditions
devised plans upon deceptive estimates Of
profitable investment which have never
heavy rebate the premium. Whoever
pays one OF these companies any large part
or his flrSt year premium Is PROBABLY De-
ing Disseminated against by the agent.
Under these conditions the Connecticut
Mutual still offers plain life insurance as
protection to the family, and tries to make
it attractive simply by making it perfect
to that end and by keeping its cost down
to the lowest possible point 1t tries to
realize the ideal results of a legitimate bust
ness, and 1t seeks to attract to its member
ship only those who want only such results
and do not want speculation on their
familys protection. And it does not try
to make one man think he is getting his
insurance cheaper than any other man, or
at the expense of any one else, or at less
than it's true cost.
INVESTMENT" INSURANCE.
But plain life insurance has to contest the
field with so-called Investment insurance"
AS if anything like Investment" could
come out of the companies that take from
fifteen to twenty-five cents for expenses
out of every dollar that comes in The
lack of foundation is concealed from ordi-
all dividends for ten or twenty years-the
larger the time the higher the commission
to the agent and the rebate to the appli-
cant. Whoever dies leaves behind him all
above the. proper cost of carrying his in
surance while he lived, and those who lapse
part of the reserves accumulated from
their premiums, in the hope that the for
FIXTURES will be so many as to fill up the
hole made by great expenses and furnish
great dividends to those who live through
the term and keep up their policies. The
immortality and cruelty of setting men to
speculate on what ought to be absolutely
sacred to the protection of their own and
other mems families is obvious. But the
Estimates" and Illustrations have
tempted multitude but only to disappoint-
ment.
To illustrate: One of the great pioneers
in this sort of speculative life insurance
is settling this year, 1895, the dividend on
Tontine policies issued twenty years ago.
Its then estimate of that dividend on
policy of $4,000 annual life premiums age
forty, was $685. it is paying only 1874;
just 49, 20 per cent. of its estimate" Scores
of millions of dollars of reserves and ac-
cumulated surplus on lapsed policies that
ought have gone to give some remnant of
protection to the. families OF those who
lapsed or to enable them to keep up their
policies, have been forfeited TO the Tontine
pool; but the great expenses incident to
doing speculative business all over the
world have eaten up the profits" and left
but that pitiful outcome.
Mark, now, how the dividend producing
power of this speculation is steadily wan
ing. The company referred to began issu-
ing these twenty-year Tonelnes IN 1871,
md fret mil m.