The Fulton County news. [volume] (McConnellsburg, Pa.) 1899-current, 1905-07-26
The Cost of Life Insurance.

LII bile iuIeTllD DebWeeu OOuSfeSS-
es by studying a number of econ
omic and civic questions and CIV
ing the readers of his newspaper
the benefit of his information and
observation. Just at present he
is writing number of letters
from New York on questions re-
lating to life insurance, the topic,
of course, being inspired by the
disclosures in the Equitable So
ciety. In one of his recent let.
ters he asks this question: "Does
life insurance IN the United States
cost too much ?" and he answers
1t with a very emphatic "yes."
Serene S. Pratt, an economist
of distinction, in recent article
ln the Worlds Work, made the
statement that the expenses of
twenty-eight American life lnsur.
ance companies In 1894 were 17.4
per cent. of the income, whereas
IN Great Britain the expenses of
ordinary life companies were on
ly 9.2 per cent. of the income, and
in Germany the government in
dustrial insurance expenses were
z per cent. Mr.. Wellman puts
the percentage of expense to in
come even higher. and says that
20 per cent. Is probably correct.
This is more than twice the cost
in Great Britain, and nearly three
times the cost in Germany. He
says: obviously American com.
panies spend too much money in
management. There are too
many high salaries, too much Law
ishness in magnificent offices,
and, above all, too much money
going out to the agents and sollc-
itors who drum up new business. !"
There has recently been pub
lished by Boston expert, vol.
ume entitled "The Brown Book
OF Lite Insurance Economies" in
which table is gwen of twenty
five leading companies, showing
the expense cost per $1,000 of IN
surance in force, and the ratio to
premiums of the various items of
expenditure. From this table
it appears that nine of these COM
panies have their home Offices in
New York city. The remaining
sixteen are scattered, although
located chiefly in New England.
The average expense cost for the
nine in New York Is $13.05 on
each $1,000 of insurance in force,
whereas for the sixteen compan.
les outside of New York it is 49,
S3. The average expense of the
entire twenty-five companies Is
SO. 86, and every one of the nine
companies doing business in New
York city is above the average.
All but four of the sixteen COM
panles outside of New York city
are below the average. In COM
menting Mr.. Wellman says
"These are significant figures.
They show that life insurance in
New York city is keyed too high.
The struggle for bigness, the ca
ger rivalry for rapid growth, par
ticipated in so keenly by the man
ayers here, are producing their
inevitable effects. Everything Is
keyed high in New York. Living
Is costly. Money is spent at a
rate which amazes us homely folk
from the modest West or the easy
going national capital. Salaries
are big in New York. Men live
high. 1t costs as much to set a
decent dinner IN this town as we
Western boys used to pay tor a
weeks board.
''The golden stream that flows
into the treasures of life insur-
ance companies of this metropo-
lis comes from all parts of the
United States. 1t is one Of the
tributes which the country pays
to New York's financial domi-
nance. And the high salaried,
fat-hving, automobile-runnlng,
swell apartment, trips-to Europe
men who control these golden
streams are not as careful or as
scrupulous as they should Le IN
the management of their trusts.
T.. a. a 4