The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1896-02-27
22.262.206
$2S.063.5Q2

SIS, 5O2
Here again the only item needing ex-
PLANTATION is the saving of s1,1S97S in the
fifteen years on lapsed and surrendered
policies. These amounted to s70,937, 3l6: the
reserve on these was 1850. 047 of which
amount $685.. 25S-or about 80 per cent
insurance. cash and otherwise. Were ours
Tontine business, the whole Sl1 ,50I,04l
and all the surplus accumulated by 1t would
have gone into the pool for the lucky
ones TO divide-or so much as was not
eaten up by the expenses of Racing"
Similar exhibits by the many Tontine or
investment life insurance companies would
be Of remarkable interest.
LIFE INSURANCE SPECULATION-A
TURN IN THE TIDE.
Over twenty years ago certain New York
companies found themselves losing bust
ness very rapidly on account of very high
expenses and very small dividends. The
enormous number of resulting lapses threat
ened their extinction but these were seized
upon as the happy basis of plan to con-
vert life insurance into a scheme for max
die or o lapse their poIicies a1 for the beDet
of the few who should live and keep paying
premiums through certain period of
years. The reserves on lapsed policies
which with us go to buy paid-up insurance
for the fam:ly-and the unpaid dividends
OF botn those who died and lapsed, were to
be put into Tontine pool. to be divided
among those VINO were lucky enough to
live and keep paying. The gamble was as
to who the lucky ones should be.
They figured out enormous probable prof
its from the enormous losses individual pol
icy holders were to suffer, and the 'Esti-
mates of these were powerfully attractive.
Rich men took the policies in certain con-
fdence that they would beat the game;
poorer men took them in imitation of rich
er men, and trusting luck to escape con-
sequences-tne FORGETTING of their dividends
md roc no fah 70 lx-tdn
Plain life insurance has no glitter; but
here was a new. up-to-date thing that
sparkled. The pool was drawn upon for
commissions to agents that were simply
staggering, and for rebates to new insurers
which became a principal means of COM
petition. The scheme swept the field like a
prairie fire. The business of these COM
panies took on a startling growth, and new
business, as a measure Of the popularity of
the new scheme, was insisted upon as the
real criterion of success. The reliability of
the Estimates could not be tested until
the day of settlement came at the end Of
and that was many years of.
There were but two ways of meeting the
scheme on which, and the commission and
rebates by which. business was being cap
tured in such enormous quantities. One
was to fall into the scheme, and offer the
same speculation with the same sort of es-
ness, and justify cne's self on the ground
that it was selling people what they
wanted" The other way was to point out
to those whose families needed protection,
and all the protection they could get. that
this was a pure gamble with that protec-
ton; that If the scheme succeeded for the
lucky few, it must be at the cost of such
confiscation of the reserves and dividends
of the many as was crime against those
thereby stripped of the protection they
needed; that the people wanted it, only
because they were made to believe that 1t
was something else than what it was; that
the expense at which the scheme was being
bod AL 4hn ccstx .f~
ing the estimated" profits. and that, in
surance being simply the distribution of
losses, and premiums being simply contri-
buttons to losses, IL was impossible 20 make
profitable investment to any one except
by robbing some else for his benefit.
The Connecticut Mutual chose the latter
course. 1t has steadily and continually ex-
posed the true characters OF the schemes
exploited in the name of life insurance; IT
has pleaded for pure life insurance to those
whose families could not afford to have
their protection gambled with; 1t has tried
to teach the truth; to show people what
their true want is; to make the cost Of
protection small as possible: it has been
content to see many of its agents hired
away, to be kept from getting new ones
by demoralizing commissions and TO do
new business by the tens of millions where
its speculative rivals-and they have become
numerous company-have done il by the
hundreds of millions. and to be criticised
as wanting in smartness and enterprise and
knowing how TO cater to the public. IL has
gone on studying how to make still better
service, instead Of seeking novelties that at
tract until they are understood. and then
must be replaced. 1t has bided its time.
Its warnings have been realized. Where
twenty years ago these companies were get
ting business by an estimate of profits
at the rate of. say. $4,000 on a man then
aged forty, they are settling that business
now at 1910. Thousands of millions OF
life insurance have been forfeited, but the
bulk OF the grist ground out has gone to
pay higher commissions and bigger re-
bates to keep the volume of new business
swelling, and has left only pitisul 40 per
cent. or less of the splendid estimates that
catered to the public.
And now the tide has turned. Even their
tremendous expenditures for business cam
not keep them ahead Of the game, at least
in times like these. One of these companies
wrote in 1895 the enormous sum of Sl32-
5C9, 533 OF new business; and yet has shrunk-
en- its amount in force, which means that
over 1888, 100000 has gone of its books last
year Another wrote Slz7. 1856 OF new
business, and $l4l, 159.715 went off It's books.
Many scores of millions OF dollars, the re-
serves and accumulated surplus on many
hundreds of millions OF Insurance. have
gone into the pool of the several Tontine
companies in all these years; but no ac-
count Of the application OF the proceeds
ever has been ever will be made. There
are no accountings.
The Connecticut Mutual renews It's plea