The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1895-11-08
COMMUNICATIONS.

10 the Editor of the JOURNAL AND COURIER:
AS the Journal and Courier does not
surrender its valuable columns wholly
to the demands Of athletics and party
politics, but reserves considerable space
for the more serious affairs of life, beg
leave to call the attention of it's readers
to the important subject of life insur-
| ance, a subject which is wrapped in
mystery to the average citizen, But
which in reality is very simple; for life
insurance is simply an agreement be-
tween many individuals to help each
other to bear contingent losses. 1t is
therefore of necessity based on the as
sumption that the death of policy
holder would be financial loss to the
party or parties in interest. If the
death of policy holder involves no fl
| nancial loss to the beneficiares named
within it then the insurance itself is
fraud, a scheme to get money for an
article which has no money value.
| This Is always the case when insurance
is carried on the lives of little children
| who do not and cannot earn anything
| for the benefit of those who carry in
surance on their lives. This is always
the case where insurance is carried on
| the lives of old people who have out
| lived their ability to earn anything.
| For sound men and women therefore
on whom others are lawfully depend
emit life insurance is for limited period
of time q, sacred duty, but at the expi-
ration of that period 1t becomes an abb
surdity, and, as managed by the old
line companies, an absurdity with
large admixture of humbuggery, for in
| their case the so-called reserve" has
| largely If not wholly. replaced the in
surance, and the reserve is simply
money advanced by the insured annu-
ally to balance the insuranceffl -:
ally to balance the depreciation in the
! insurance value of his life, hence there
is not one cent Of Insurance in it.
| The tabular cost OF carrying risk
of one Thousand dollars for one year on
the life of a man thirty years Of age is
$842, not counting cost of mere admin
istration. Every dollar above that
sum therefore would be equivalent to so
much reduction of the real insurance
value of the policy. Our great mutual
companies charge an annual premium
of $3.50 for an ordinary life policy for
! 81, 900 on the life of a man thirty years
of age, which is SASS more than is re-
| quired to cover the tabular cost; the
real insurance even the first year there
| fore is that much less than what the
face calls for. During the twentieth
year the man would be insured for not
more than $596.42 for his legal reserve
would amount to s252.29, and the differ
ence in the rate charged by the COM
pany and retained for twenty years,
and the rate charged by one of the great
stock companies for a similar policy
would amount ito at least $156.29, max
ing the total reserve $4O9.5S. That is to
say, his policy of 81 900 Is about Al per
cent. humbuggery. If he were to die
during the twentieth year the company
would, Of course, pay his family the
1 full 1000, but at the very lowest cal
culation $409.5S of that $1,000 would be
his own money, for which the company
had not given one penny's worth of
| benefit This makes good the assertion
that at the expiration of certain
period in life, life insurance becomes an
absurdity. To make the matter still
clearer I will here give the relative
tabular insurance value of a life at
different periods as determined by the
expectation Of it's continuance at the
same periods. If the insurance value
| Of a life is $1,000 at thirty years of
age. it's insurance value at sixty years
of age is only $39994, and its insurance
value at eighty years Of age is only
$13SS3.
The moral Of the facts here pointed
out is this: The whole problem of life
insurance needs a new solution, and
no time should be lost in furnishing it.
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