The Ordway new era., 1905-06-16
,,ss r.suEascs TOO COSTLY.
r,,,,urh NaaIpuIstion Of fnsas f"hey-
Itaiaer !. Io.~r-

Itaiaer !. n Io.~r-
The articles which are daily being
,,,,bllshcd with reference to the man
.r.nrni and methods OF the Equitable
rl,e Assurance Company are awaken
~. e, a greater degree than ever be-
fore the public interest In the NE IN
surnrce business in general mat
bpslpess OF such magnitude should be
:, little understood by the average
rarE5n seems Incredible: and yet II is
a fsrt that the vast majority of policy
bolders know little OF The company or
compauies In which they are Insured
,,d sf1l les Of the manner In which
their premium payments are used. Tue
Insurance companies are considered 10
he anon. the most stable Of insiitu'
tons. and apparently II has been sur
fcIeut f1r the average laymhn TO feel
assured that, iu the event Of his DEATH
his heirs would receive the amount
guaranteed. Beyond that be does not
20. and Of the fact that be Is not re
rcIyluE full value for his payments, he
Il. In many instances, unaware.
Life Iusuruuce IS a necessity. That
grave evils Of management exist, that
usllfv- holders moneys are being used
Improperly. has been amply Illustrated
In the case Of the Equitable Life. Per
sanal fortunes have bcen 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 c0uservuiIveiy and honestly
managed j. well known. These com
paules DO no; accumulate huge sur
pluscs. and. In fact. the accumulation
Of large surplus funds j. unnecessary.
some companies return the profits De
rived from the business 20 the policy
holders a. the end Of every year. and
accumulate only o sufficient fund 20
provide FOR any slight depreciation
which may occur Ia the -alue Of their
securities. II has been suggested that
q remedy for the evils In the busi-
ness that exist to-day lie Ia !eEisis-
ton which VIII compel ali compsnies
20 disburse Their earnings among the
r1Ilcy-luIdsrs annually. There are
many companies which 10 this. and II
has been proved couclusIycly that the
net cost Of policies issued on this plan
has bgeu less thau Of others. In order
that satisfactory results may be at
isincl by the annual dividend CON-
pauy the management must be con
servative. and all channels 81 uuneces-
sary and dishonest expenditure elm
mated. The policies Issued 10y the
New York companies provide. in the
great majority Of cases, that the sur
plus earnings shall not bc PAID until
the end % the twentieth year. and
then only In the event Of the holder
living out that period and having made
an payments on account OF his con-
tract. As a matter OF fact. only abou;
out-quartor Of the persons who Insure
are persistent In their payments. aud
the foFfeitures Of Prcais which the
other three-quartcrs are compelled TO
make 40 70 increase the surplus, which
Is already larger In amount than Is
necessary FOR the safe conduct Of the
business. II j. an ouigrowih Of the
old ioutinc methods. and Is manlfes;iy
unfair. The poiicy holder who dies
and the one who. through adverse cir
cumstaugcs, i compelled 10 permit his
policy TO lapse before twenty years
have expired, should receive the beue-
Its OF the profits made from their pay
uents. The amounts paid In dividends
by the New York companies have been
absur,ily small, and have been ex-
cecded by the returns made hy annual
dividend companies on policies Of SIM
ilar Kind and amount, and IN the lat.
ter Institutions every member has re-
ce.ycd his just due, whether he sur
vived the twenty.year period or not.
The conclusion is unavoidable that
where surpluses are permitted 10 ac-
cunulatc and are not 80 dlsbursed they
are misused. That the evils OF the
business are directly traceable TO the
accumulation and control OF these large
surplus funds IS well known TO those
familiar with conditions as they exist.
and IL the deferred-dlyider.. companies
were compelled by law 10 divide their
earnings among the body of policy
holders every year they would he
forced to pursue different practices in
order to compete with the honestly
managed institutions which are hein,
run for the beneht OF the policy. holders
and not the officers, and which are at.
tainins better iesulis.-San Francisco
Argonaut.
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