The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-06-14
WRITING GREAT POLICIES.
Evils of Reckless Life Underwriting

New York Evening Post.
Radical reform in the custom of writing
large policies on the lives of young men is
likely to be brought about as result of
the disclosures in the Thayer case, which
is now under investigation in Boston. Many
of the large New York life insurance COM
panies were interested in the mysterious
death of the assured, having written poll
cies on the life of the young man. Some
of the contracts were taken out only few
weeks before ne died, and the question now
is whether the companies are liable under
the suicide clause tor the amount of the
policies. Several have already signified their
intention of centesting the claims and de-
clare that they were grossly deceived re-
specting the financial position of the as
sured. The fact that the claims arose dur
ing the contestable period makes 1t quite
ment if they are inclined to do so.
There were several hundred thousand dol
lars in outstanding risks the life of
Thayer. His applications for insurance were
apparently granted by the companies with
out much dispute or any very real investi-
cation into his financial status There are
not, as rule, many young men in city
the size of Boston rich enough to justify
such an outlay as payment of premiums on
half a million dollars insurance would in
volve. Applications from a young man for
suspicion until good and sufficient reasons
are advanced for such expensive protection.
Although many companies are careful about
such large risks, the race for premium in
come is so intense as to make them negli-
gent at times regarding the moral hazard
involved. For that rea son great risks
written without due thought of the conse-
quences attending such mysterious deaths
often occur. While the Thayer claims
may be kept in court for years, the compa-
MES may find it very difficult to establish
their contentious.
An insurance expert of this city, who is
familiar with the practice of writing large
risks, said: such reckless assumption of
heavy liabilities should be condemned as
against public policy. There are scarcely
fifty men in New York to-day financially
competent to take out $780, 600 or $500, 900 life
insurance. Yet l think il safe to say that a
thousand such risks could be easily placed
If the applications should come into the
market tomorrow. Although the companies
are sometimes very careful about writing
oftentimes display the same caution in re-
spect TO the aggregate outstanding liability
represented by mans policy. Hence
while one man might find it difficult to
place a 100000 risk on his life, he would
probably experience no difficulty whatever
in securing ten policies for $50. 900 each.
1T is manifestly unjust to policy holders
in general for company to assume such
heavy risks without very careful diScrimi-
nation. Insurance should be regarded in the
nature of protection not speculation, and
The moment that you give il the character
usefulness. Much of this abuse arises of
course, from the exertions of ambitious
agents who want to secure heavy commits
sions by writing large risks. If the compa-
MES readjusted their agency forces and
gave greater heed to the elimination of I'M
due risks, guarding specially the moral haz-
ard in such cases, they would make very
much better showing in the end. The Thay-
er contest, / think, will be productive of
greater conservatism.