Morning appeal. [volume] (Carson City, Nev.) 1877-1906, 1905-11-01
&c CONSERVATIVE LIFE iNsu-
RANCE COMPANY OF Los
ANGELES.
CONTINUED from Page y

CONTINUED from Page y
from the beginning was charged up
against the policy, the same to be de.
Quoted in case of death. The lien idea
is based upon the theory that q COM
pany may safely loan to a member the
amount Of the reserve, but the cases
are in no sense parallel. The
CD OBJECTIONS TO TILE LIEN
PLAN
may be briefly enumerated.
Eery Insurance man knows that
policy against which there is loan
to the full amount of the reserve is
almost certain to lapse sooner or later.
On the policy of $1,000, carrying a
loan of say $500, there would be q
balance of $500 payable in case Of
death. The member has in reality
only 500 protection, though paying
the premium on $1,000 insurance, plus
interest on $780, If he is still insur-
able, he can get, at his attained age,
a new policy of 500 (the actual
amount of his protection) Cor less
money in some other company, as he
is very apt to do SO. If he is an inn
paired risk, averaged or invalid. ne
can make no change but must cling
to his present policy. The immediate
and constant tendency of the practice
Of making large loans on policies is
to lapse the good risks and retain the
bad
Most companies make loans 70
their policy holders and it is an ac-
commodation which may be safely
granted under proper limitations,
since comparatively few ever borrow,
and fewer still to the full limit.
It is certain. however. that no con-
sentative company would acord the
privilege of loans on demand to the
full amount Of the reserve. were It
probable that any considerable pro-
portion of the membership would avail
themselves of the right, but the re-
serve lien system practically com-
pels every member to become Dor
rover to the full limit Of the reserve.
"a LOANS VS.. LIENS.
Genuine loans, made in good faith
on old line policies are much less OBJ
jectionable than reserve liens. The
old line member has been accustome ed
to paying large premium, he has re
lived and used the money represent,
ed by his loan. and there preceives
the justice of paying interest upon
it, while he realizes that his policy
as security for that money has actual
pecuniary value He will hesitate C
sacrifice that value by lapsing the
policy.
The assessment member who has
long been accustomed to cheap in
surance," resents the increase of hi.
premium, especially when accompaE
led by a large lien against his policy
upon which he must apy interest, an
which greatly reduces the actua
amount Of his protection. The fictioi
of calling his lien loan" does no
appeal to him. He knows that n
hasn't had the money, looks upon tn
alleged loan as fraudulent, and, unles
he is now averaged and in impaire
health and therefore helpless, he i
very likely to drop the whole bushes
rs soon as he acquires a knowledg
of the facts. The fact of the lien ma
have been artfully concealed in tn
language of the contract, but he wi
learn of its existence when the inte
est comes due, or when some brigt
'old line" agent explains the situatio
to him.
(5) THE ACTUAL RESULT.
Such would be the expected effet
of the reserve lien system Such til
Conservative Fife, the Mutual Reserv
Northwestern National and 9th.
policy lien companies have found |
be the actual result. The Conserv
tive Lifess annual st1tement, file
with Iowa insurance department
shows new policies issued in lowe |
1901 to the amount of $5,441,700, b
~ the business transferred by tt
Southwestern of Marshalltown. I
this amount $962,2O0, or nearly on
sixth, lasped before the end of IL
year. Unquestionably these were IL
better risks. The business that r
mains must be greatly deteriorat:
in consequence, while the inevitab
tendency will be for the situation
grow constantly and rapidly worse.
co. A CULPABLE TRANSACTION
The Marshalltown transaction !
fleets no credit upon the Conservati
Life management from a moral poi