The Chickasha daily express. (Chickasha, Indian Territory [Okla.]) 1899-current, 1905-06-15
LIFE INSURANCE TOO COSTLY.


4 Lir : lNoUhANCE IOO SOo lLr-
Through Mnaipulation OF Funds Policy
Holder is Loser.
The articles which are daily being
published with reference to the man
agement and methods of the Equitable
Life Assurance Company are awaken
ing TO a gseater degree than ever be-
fore the public interest in the life in
surance business in general. That a
business Of such magnitude should be
so little understood by the average
person seems incredible; and yet it is
fact that the vast majority of policy
holders know little of the company or
companies in which they are insured,
and still less of the manner in which
their premium payments are used. The
Insurance companies are considered to
be among the most stable Of institu.
tions, and apparently it has been suf-
ficient for the average layman to feel
assured that, in the event Of his death.
his heirs would receive the amount
guaranteed. Beyond that he does not
go, and of the fact that he is not re-
ceiving full value for his payments, he
is, in many instances. unaware.
Life insurance is a necessity. That
grave evils of management exist, that
policy holders moneys are being used
improperly, has been amply illustrated
in the case of the Equitable Life. Per-
sonal fortunes have been gained by
officers through the manipulation of
the funds under their control, and the
individual policy holder is the loser
That there are some companies
which are conservatively and honestly
managed is well known. These COM
panies do not accumulate huge sur
pluses, and, in fact, the accumulation
of large surplus funds is unnecessary.
Some companies return the profits de-
rived from the business to the policy
holders at the end of every year, and
accumulate only a sufficient fund to
provide for any slight depreciation
which may occur in the -alue of their
securities. 1t has been suggested that
remedy for the evils in the busi-
ness that exist to-day lies in legisla-
tion which will compel all companies
TO disburse their earnings among the
policy-holders annually. There are
many companies which do this, and 1t
has been proved conclusively that the
net cost Of policies issued on this plan
has been less than of others. In order
that satisfactory results may be e.
tained by the annual dividend com
pany, the management must be con-
seryative, and all channels of unneces-
sary and dishonest expenditure elm
mated. The policies issued by the
New York companies provide, in the
great majority of cases, that the sur
plus earnings shall not be paid until |
the end of the twentieth year, and /
then only in the event of the holder
living out that period and having made |
all payments on account of his con |
tract. AS matter of fact only about
one-quarter of the persons who insure |
are persistent in their payments, and |
the forfeitures of profits which the
other three-quarters are compelled to
make go to increase the surplus, which
Is already larger in amount than is
for the safe conduct of the
business. 1t is an outgr6wth of the
old tontine methods, and is manifestly
unfair. The policy holder who dies
and the one who, through adverse cir
is compelled to permit his
policy to lapse before twenty years
have expired, should receive the bene-
Cts of the profits made from their pay
nents. The amounts paid in dividends
By the New York companies have been
absurdly small, and have been ex-
aeeded by the returns made by annual
dividend companies on policies Of sini-
lar kind and amount. and in the lat
-er institutions every member has re-
,eived his just due, whether he sur
fived the twenty-year period or not.
The conclusion is unavoidable that
where surpluses are permitted to ac-
,umulate and are not so disbursed they
ire misused That the evils Of the
business are directly traceable to the
and control Of these large
urplus funds is well known to those
amiliar with conditions as they exist,
nd If the deferred-dividend companies
we're compelled by law to divide their
arnings among the bGdy OF policy
Iolders every year they would be
orced to pursue different practices in
rider to compete with the honestly
Damaged institutions which are being
un for the benefit of the policy holders
nd not the officers, and which are at
aiming better results.-San Francisco
This Elephant Thief.