Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1906-04-01
OF LIFE INSURANCE
Fratemsl Societies Date Back TO the
Dawn Of History.
MODERN FRATERNALs ARE PROSPEROUS
Later Organizations Based ON safe
and Scientific Principles and
Bound co Succeed In
Their Mission.

Their Mission.
Fraternal life insurance interests every
body who has a spark Of affection for
those dear to them. It is a system Of re-
cent origin in its present form. although
societies with similar ends have existed
as far back as history goes. It Is gem
orally conceded that the first form OF life
insurance was the fraternaI idea, the mu-
tusl pledge of individuals to care for the
sick. bury the dead and pay such sum
as might be raised by mutual contribu-
tions or as stipulated by the articles OF
the association 60 the heirs. Soon after
the civil war i'm America there was
great activity in life insurance. and a large
number OF stock and mutual COM
panies were organized and were seeking
business. The premium rates were con-
sidered beyond the means OF laboring men,
and they were ready to grasp any propo-
sition promising mortuary benefits at con-
siderable less cost. Out OF this condition
grew the first American fraternal insur-
snce society, organized at Meadville. Pa,
I'm 1868, under the name of THE League
of Friendship, Supreme Mechanical Order
Of the SUM-" It's objects as expressed in
its preamble were "the protection Of the
workngmen." J. j. Upchurch Joined II,
but, dissatisfied with It's construction, with
drew and later in the same year formed
the Ancient Order OF United Workmen.
This society was a purely mutual organ
ization land made provision for the pay
ment Of not to exceed s2O00 on the death
Of a member The amount to be paid on
each benefit call or assessment was 81, and
the limitation of age was q years at join
ing and no medical examination was re-
quired.
First Graded Assessments.
In 1873 James A. Demaree and seventeen
United workmen members founded the
knights OF Honor, which differed from
the first organization in that it deter
mined that members over IS should pay
greater sums as assessments than those
under that age. The Ancient order OF
United Workmen abandoned the uniform
81 rate and adopted the graded plan. In
1878 the yellow fever epidemic in the south
gave the fraternals their severe test, and
II was then prophesfed that they could not
Withstand the strain. The knights OF
Honor had 1893 deaths during that year
and paid out sSs5.OOO thereon. The pay
ment of every death claim at this critical
time assured the people that the fraternal
insurance order had come to stay. Dur
ing the next ten years the Royal Arcanum,
National Union. Maccabees. Royal League,
knights and Ladies of Honor, Modern
woodmen of America and FIVE or six other
societies came into existence. adopting the
knights of Honor idea of graded assess
ments. A myriad Of speculative or down
right swindling societies followed In the
wake of tNe better organized bodies. taxi
ing advar Of the prestige gained by the
yellow fever epidemic test. and many per-
sons were deluded by the attractive plans
of insurance offered to gull the public
These swindling concerns were most nu-
merous I'm Pennsylvania, Massachusetts,
and Maryland. and the state legislatures
set about investigating them and provid-
ing means for protecting the public. Sew
eral OF the swindlers were arrested and
others in the confidence. schemes were
forced TO go out of business. The genuine
fraternal insurance societies were bene-
fited by the Investigations and continued
to gain in public esteem.
Not Fully Developed.
Fraternal life insurance is still largely
! In a chrysalis condition. State legislatures
have enacted laws controlling the socie-
ties, and the very few that have conn
bine" in control will sooner or later be
curbed by compulsory legislation.
The weakness Of the fraterual life in
surance system today is that there are so
many societies that ignore the mortality
experience requirements and are deluding
their members by only collecting from
them a sufficient amount of Assessments
or premiums each month to meet the pres
emit deaths incurred. and are making no
provision to provide for the payments of
death claims in the future. The failure of
such societies is inevitable unless they
change their plans Some OF the older
societies have been compelled to increase
the monthly contributions to such an ex-
tent as to create apprehension among the
membership, who. in reality should not de-
muir. because they have been getting their
protection at less than cost, and now,
when the mortality reaches its normal con-
dition must be met by increased contribu-
tions In no instance has the increased
cost been nearly as large as the amount
charged by the insurance companies.
New Societies Have Reserve.
Most of the recently organized societies
are Fronting by the experience of the more
careless. not to say ignorant pioneers, and
are accommodating a reserve. equalizing OF
emergency fund. The rates Of assessment
are higher than in the careless and I'm.
provident societies and higher than pres
ent actual needs. but the surplus is in.
vested In fits reserve fund and the Interest
compounded, so that later on, instead Of
a burdensome increase Of assessment rate
or increase OF the number OF assessments
or possible failure of tile society, tn,
assessment rate is not ~ be raised ant
the accumulation Is ayailed TO meet ever
claim In full.
II society has made a careful com
putation from standard table OF expe
rience and states to you that the soclet,
must collect a certain rate OF assessmen
at your age, and that certain per cen
OF this goes into a surplus fund to be IN
vested to meet future actual cost Of you
| insurance. then You NAV feel cnmnara