The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1901-02-27
and actual dividends in the 10 and Is year
postponements are still more striking.
New Stimulants Needed!

New Stimulants Needed.
Obviously, such wide discrepancies be-
tween estimate and result. between brilliant
prospect and comparative failure, pointed
toward the ultimate breakdown of the
speculative attraction, and other novelties |
of plan and practice began TO appear by |
which TO incite agents and draw the pub |
lie.
ConcenIment of Forfeitures.
| Much criticism of the forfeiture invest !
ment schemes, as gross injustice alike to
| polcy-holder and beneficiary has led the
| companies to adopt forms of contract as
remote as possible from life insurance poll
| icies in form, and called by every sort of
name suggesting investment instead of
| insurance.
Commission and Rebates.
| Agents have been attracted and stimu-
| lated by commissions and allowances from
| two TO five times what they were thirty
years ago. and have. I'm their turn. used
| these to stimulate the public by giving
| away in rebates TO new blood whatever
was necessary to secure it. until. in many
of the companies, new insurer can get
| IL he stands out for tia rebate Of from SO
| to 100 per cent. of his premium drop his
other rival and repeat the process each
year. so long as he is willing to take the
| risk of being able to pass a new examine
| ton.
| This makes business easy TO get but hard
| to keep. the lapses of such companies
show.
Competition by Liberality.
Another means Of stimulating business
| has been the rivalry in 'liberality" IL be-
gan in dropping more less OF the de-
lenses against fraud. Fraud may be COM
mitted in two ways: The applicant may de-
| celye the company by false statements as
| TO his family or personal history. habits of
| life, present condition. etc, that 1t issues
| its contract when 1t would not have done
| so had ii known the truth or issues ii at
a different rate from what it would have
| charged had the real risk been disclosed;
| or. he may willfully destroy his own life,
! none. All these things, IL successful, cost;
| and the cost is borne by the policyholders
who do not deceive and do not willfully
destroy themselves. 1t is therefore the
| duty of a company's managers to protect
| honest policy-holders against such frauds |
and losses. When one is asked to make
| contract based on the statements of the
other party to it, he has right to know
| the truth of them, and to be absolved from
| his promise II they prove to be false. That
is the simplest equity and morality. That
| is the rule in every other kind of contract
Incontestability.
The first 'liberality' proposed was, that
| If man could conceal his deception for
| a year or two, or three, his policy should
| be '.incontestab,e." no matter how gross
atty that now some companies call their
| policies incontestable from the very out
set; If the deception once passes muster
| its later discovery will be deregarded.
VIII Courts Permit Fraud:
| There is, however such thing as pub
| lie morals and a public policy in re-
gard thereto; and the courts are In the
habit of regarding fraud and contracts
permitting fraud as offenses against pub
| lie morals. and forbidden by public policy.
and of dealing with cases of fraud &C
| cordingly; and 1t is not probable that, In
| the end fraud in life insurance will be
found to be less fraudulent, more laud-
able, or more conducive to commercial
| and public morality than fraud in any
other matter. If the courts permit
| it in life insurance they must permit
| 1t in all transactions. They can permit it in
any only If there is no difference be-
| tween right and wrong. and If the truth
and a lie are of equal moral and com
| mercial value. and of equal safety for
the public. Permission to any fraud is
an invitation to all fraud.
Liber.lity as to Self-Destructions
Another liberality is permission to de-
stroy ones self in any manner and make
the rest pay for it. No company would
4 in these days at least, contest claim
growing out of suicide which was, under
any fair presumption, the legitimate out
come of disease. But the cowardly suicide
4
them-is distinct fraud against men who
| have the courage to live, and the honor
to fight the battle of life fairly and stay
by their families.
Annual Cash Values.
| Another liberality is the annual cash
Value by which one may, any year, de-
mand back from the company his contribu-
| ton to the reserve, thus at will changing
| the transaction from insurance to saw
| ings bank deposit.
| The whole theory of life insurance and
| all its calculations are based on the dura-
| ton of its insurance contracts to natural
| maturity. Only so can it fulfill it's special
purpose, secure that average experience
! which gives security to its undertakings,
protect itself against those fluctuations of
| mortality and in general financial condi-
| tons which might otherwise be destructive
| of a company's existence, and only so can
| the business be handled in a manner to
| give the lowest cost. The annual cash
value makes it possible to wreck or cripple
a company In year. Its policy-holders
| may all withdraw. many of its health
| lest lives may withdraw, taking its quick
est and best assets, leaving only impaired
1 lives to cause abnormal death loss to be
| met with reduced income and poorer assets,
| as TO leave ii unable to continue business
with advantage or even safety That is
| no true liberality to those whom life in
| surance undertakes to protect, for whom
| 1t was created. and for whom
| it should be administered. Life insurance
| companies cannot serve as savings banks
| without danger of destruction or of Sc
| rious impairment in efficiency for their own
| special purpose. However willing they may
! be to take up their policies for cash when
| the conditions make ii convenient and safe
| to do so, an agreement to do it at any
| time and under any conditions. adds a
distinct element OF danger to the future.
| Loans ON Policies.
| Another and kindred liberality is loans"
| on policies, by which the policy-holder has
| the privilege to borrow his contribution to
the reserve, pledging his policy as collat-
| eral paying not paying his debt as he
| pleases; and he rarely pleases to pay. This
was adopted TO meet the stock argument
| of the assessment companies: that a man
| should pay each year only the mortality
| cost for that year, and keep the reserve in
| his own pocket.
This again is a seeming liberality to the
| policy holder, bat not to the family out of
| whose policy the loan must finally be paid.
| No who has seen the hardshipS- and
the disappointments to families caused by
| such settlements can covet the task of
| having to make them; no man who stops
| to realize what 1t means to his family can
willingly leave such shadow his MEM
| DRY. Life insurance is a sacrifice of ones
| self for the imperative and unavoidable
| duty he owes his family. Loans and cash
| values are the sacrifice Of his family for
| himself
| The liberality to the policy-holder him.
/ self is less than it is made to SEEM Under
| the usual forms Of policies the reserve in