New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-05-11
LIFE INSURANCE.
IN Equitable officials Exposition of
It's Principles.

THE LIFE INSURANCE COMPANY. By VII.
lam Alexander. l2Eao. Pr. x go tAppe'oHs
The most far-seeing publisher and the most
commercially minded author could scarcely have
worked together to produce volume more pat
10 the moment than Mr.. Alexanders book on
life insurance. OF course. al the time the pub
LEGATION was planned 10 thought Of the events
which have attracted much attention TO the
society of which the author is an officer coulo
have entered the minds Of those responsible TOT
the appearance Of this work. There are doubt
less few persons of years Of discretion who nave
not had abundant opportunity to have the ad-
yantsRes Of life insurance eXpounded to them
rv ever willing instructors. But each Of these
interested lecturers is usually the advocate or
some special company, and often or some spe-
cial form of life insurance. that in listening
to the merits Of this or that policy the auditor is
apt 10 lose sight Of those general principles on
which all life insurance is based, knowledge
Of which will enable him to exercise wise
choice in the selection OF the kind which is best
suited 20 his own particular needs, 1t is this
knowledge which Mr.. AleNander's book pr1n1aTl-
" supplies rather than discussion Of methods
~ administration. although there is practically
no point Of real importance in the whole range
of the subject on which the author does not at
least touch IN passing
As he prophetcalIy and truly observes, ire
insurance has also its romances, its mysteries
its surprises, its pathetic and humorous cpl
sodes" on these. however. he does not dwell.
Instead he devotes himself at once to con-
sideration Of what life insurance really is This
may be summed Up in the statement that ii is
a device for bringing together number OF peo-
rle who agree that il certain loss fall upon
one Of them, all shall unite in repairing that
loss" Most significant is the principle which
IS enunciated in the following paragraph. which
makes clear the inherent mutually Of all life
insurance. no matter on what plan" it may be
carried on:
It IS true that insurance IS business, and that
this business is conducted by insurance M 't
customers OF The company insure one another
In other words. il IS merely a convenient
means of administering trust. the expense OF
which is provided for by loading" the net cost
Of insurance as worked out in accordance with
the experience tables Of mortality, with an addl-
tional charge somewhat more than sufficient to
cover all possible emergencies. A comparison
Of the tables of net and gross annual level pre-
rniums which the author furnishes shows nat
this loading in actual practice IS about 53 ID
per cent As much of this excess as is not re-
aured for purposes of administration becomes
a surplus which belongs 10 the pOlicyholders
and is apportioned among them pro rata. either
annually or at the end Of a definite period. From
this will be apparent the force Of another prin-
ciple which Mr.. Alexander puts forward, that
Theoretically one policy is good as another;
the value according to the premium paid is pre-
sumably the same" The purchaser has merely
10 decide which form Of the many offered is the
one which in the end will best minister TO his
individual necessities or preferences.
The plan which Mr.. Alexander has adopted is
10 follow the history of an imaginary company
from its beginning studying each problem as
il presents itself. His style is clear and free
from technicalities He first lays down the
fundamental principles, and then illustrates
their application in practice. He thus dsposes
convincingiy Of the contention that insurance is
in any sense either charity form Of gam
bling. since in the case the policyholder gets
precisely the protection he pays for, and in the
other he gets it certainly. While most points
in regard 10 which there are differences of opin-
ion or practice in the conduct OF the business of
life insurance Mr. Alexander is non-committal
in his statements there three subjects in
which he makes no secret Of his views. He ar
CUES against all assessment forms of insur-
anoe; he urges the injustice, if not the danger,
Of too high surrender values and he successfully
fails TO conceal his preference for dividing sur
plus under the deferred dividend" plan. It is
evident that he considers the advantage of this
plan. in enabling the continuing policyholder to
receive his full share Of the surplus 10 out
weigh all the arguments he quotes against it.
or course. where dividends are declared annu-
ally prudence dictates that a portion of the sur
plus should be retained for contingencies. where
as when they are declared at the end of a term
OF years only small percentage Of the policies
Will mature in any one year one Of the chief
objections 10 the deferred dividend is that il
leads to the accumulation Of too large sur
plus and tends TO extravaganza Of marriage