The daily morning journal and courier., 1901-02-23
Present Status of Competition.

] IIeSeuL CldLuS or COIlpellllOIl.
 Out of all this, the situation as re
 spects the life insurance business
 that which is offered the public in it
 name, and the methods by which busi
 ness is promoted, by the great majorit
 of companes-has developed into this
 There Is practically no attempt to gel
 life insurance as such and at annua
 cost; it is not offered unless men insis
 on having 1t, and the agent gets but ;
 very small commission for selling it
 the companies push and pay the higl
 commissions for some sort of invest
 ment' bond or contract; the essentia
 feature of the investment is the for
 feltures which can be worked into 1t
 This takes time; so dividends are de
 ferred for five, 10, or 20 years-tht
 longer deferred, the higher the com
 mission-in order to secure as many for
 feitures as possible. All contract safe
 guards against even wholesale frauds
 are practically abolished, and the pro
 lection of honest policyholders is Jeff
 to what the various courts may regard
 as expedient for public morality. The
 companies are, by the annual cash value, putting their corporate integrity
 and the validity of their insurance
 contracts, completely at the mercy of
 those who for personal convenience, or
 i'll panic, may wish to withdraw, talk 1 ing with them the good lives which give 1 a safe average mortality, and the funds
 which alone make the insurance con-
 tracts secure. By '1oans on policies, , which are rarely paid by the borrower, they offer every facility to sacrifice to his personal convenience as large a part of his family's protection as he can borrow; and, to crown all the fight between the companies which do all these things is made mainly by "re- bates' of premiums, carried to such a degree that devices are now being adopted which may enable company to dispense with any legal reserve lia- bility for the first year, leaving almost the entire first years premium availa- ble for expenses; device which can be extended to any number of subsequent premiums when the exigencies of com- petition which have caused its use to the extent of one premium, shall have so grown by what they have fed upon as to require the absorption of more.
 Where the Connecticut Mutual Stands.
 During all the long struggle out of which this situation has developed, and amid the many schemes devised to at tract public attention and favor to something else than life insurance, the attitude and position of the Connecti- cut Mutual has never been doubtful.
 It has held to the cardinal facts: Life insurance is for the protection of those dependent on mans life; their dependence makes it his unavoidable duty. Those dependents we assume to protect by our contract, at his personal cost; our duty to them is to make that protection as large, as secure, and as certainly available to them as possible; our duty to him is to make its cost to him as small as possible.
 These things are axiomatic; and cer- tain definite and indisputable proposi- tions grow out of them, Our policies should be framed in every detail to give the protection intended to those for whom it is intended. They should not set up a scheme of speculation in the forfeiture of that protection by those dependent on it, nor of his payments by the man who has paid for it. The in ducement to policy should be the pro- lection it offers; the motive in taking it should be the faithful performance of his unavoidable duty by him who has made others dependent on his life Business should be gotten by educating men to this standard of duty and of its performance, and not by changing the business into something else, and some- thing which appeals to selfish interest first and leaves duty to take its slender chance in five to 20 year lottery.
 Annual Dividends, and Why.
 The cost of protection to the man paying for it is the difference between the premium charged on the face of his policy and the surplus returned to him. In this adjustment he pays his actual share of the mortality and expenses, and is credited with his share of any surplus interest earnings. The savings from mortality, expenses and interest are determined each year. Each year the company knows just what his risk aas cost them to carry; therefore. each year the man should pay that cost and 10 more. In other words, as the cost of each policy is annually determined, the surplus, if there is any safely divisible, should be annually returned, so that ,nly the actual annual cost is annually paid.
 The only proper reason for deferring dividends is either that there is nothing 1 0 divide, or that there is something in 1 he condition of the company or it's bus { ness which renders division highly nexpedient.
 What Deferred Dividends Conceal.
 Annual dividends put the manage nent of a company to a constant test. Deferred dividends put off that test to he end of long period of years. By lnnual dividends man knows all the | ime just what his insurance is costing [ i'm. With deferred dividends he can- { lot know what its cost is until the end f the period, if he lives and holds on; ut if he dies before that time, it will ave cost him too much by the amount f surplus forfeited, and if he lapses, it will have cost him too much by the mount of surplus forfeited, and also by he amount of reserve forfeited to still urther increase the surplus.
 The annual dividend is a steady and owerful incentive to prudence and conomy The deferred dividend gives
 wide and long opportunity for the ex- ravagance and consequent high cost ', rhich it was originally invented to con- cal, and which have been further en-