The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1905-12-31
4, Non.1,articipatlng.

s4FHO lluCT{Lu foregoing SCalO OL IllOH-paTIl-
scipating premiums, 4 I, says he, "the COM
pany In question maintnins the highest
reserves known to life insurance in
America, higher also, It should lie n oted,
for five years at least than It & can put
up out Of tho premiums after the meeting
of mortality cost and the ex penscs. i1,-
Guiding cost of procurement; 3 but that
applies to its participating rates as well,
dividends being annual" He Il conclu des,
therefore, that the non participate rates
must be amply adequate. vet they are
fully 20 per cent. lower than the parts
gcpating premiums. II The non-partic ipating
rates are believed ~ the officers Of the
company to be- large enough to cover all
necessary expenses, meet all mortality
costs, make good and provide this high
reserve tier about the fifth year and
afford a good margin OF prof. What
more, he asks. Is desired or desirable. in
a & participating premium n
lit Is not denied that the non partlc ipat-s
ing rates are high enough for safety and
to pay the face value Of every policy at
maturity. II this be not true. then par
Eticipatlng insuranceis fraudulent, for rho
man who holds a participating policy may
trcnsona bly, expect 10 receive indy dendsl
a sum at least as large as the excess OF
rate which he pays. IN fact. he expects.
TO receive in dividends more than he pays
in the way OF excess, otherwise. surely.
lie would take q on-participa ting policy.
sgtOf course says Mr. Dawson, Il. EVERY
body is conscious that \ IL lie were going
to purchase life insurance at d W. 1xeds
premium without the expectation Of divi-s
dends hefwould want a lower rate Il and 1T
may be acknowledged ut$this variance
III premium tes Is intended to acc ommo-5
date that view. 8aS
+ y but why should not a mutual corn
5pany. for instance sell the insurance at
as close margins as possible consistent
with safety thus giving a raj e as low as
a stock company can, and then underbld#
the latter by giving in dividends what
ever profit is realized -
The promises OF life Insurance COM
panles to participating policy holders.
have been very flatterlng. but have these
promises been redeemed Have such
policies received dividends that would
Justify the excess OF rate? We cannot
speak by authority, but we doubt If they
have. and we believe that the tire will
come when participating insurance Will
DO abandoned. 1t IS tempting. but We
do not see how It can appeal to the dis
Greet business man. Take an Illustration
A man at 40 buys a $4,000 policy on the
participating plan, the rate would be
$500. 40; on the non participating plan it.
would be $3.50. 20. Here is q difference OF
s532o a year in favor OF the -partici-j
pating policy, enough to carry s., 900 worth
OF Insurance. In other words he can carry
on the non-participating plan $4,000 worth
OF insurance for what $1,000 would cost
on the participating plan. Now tho face
value OF his policy Is guaranteed, while
the dividend is a. matter OF promise. Is
1t not therefore. better for him to save
the difference Of $50 q year and invest IT
in something else or invest It in more
non participating insurance than to turn
&c over to the insurance company for
promised dividends which may or may
not be Forthcoming? 155 E. ..s3 3,E4
"a But Mr. DnWson's contention Is that
tho on-participat!ng rate is amply high
10 provide for all expenses, including Q
fair profit 10 the stockholders, pay the
policlos as they mature and still have q
comfortable surplus.