The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1906-05-12

40 GullOi VI IuS JOuIndl anu OSuIleI'
The truth of the above "old saw" is
strikingly illustrated liz these days by
the general discussion of the life insur-
ance problem which is now going on in
this country, on the street, in the office,
| in conventions, in new books, in the
daily newspapers, in magazines, legis-
! latures and the courts Among the
hoary-headed errors thus discussed is
''the deferred dividend scheme" Like
many another rogue, it has been caught
with the goods in its possession and
fairly convicted as fraud and a thief,
but its actuarial fathers and manage
rial friends embrace every opportunity
that presents itself to them to defend
| it, to praise it, to proclaim its wonder
full popularity, and to affirm that 1t
meets felt want" or demand, that
the insuring public want It, and have
right to it," etc. The same claim ex-
actly could be made on behalf of the
late Louisiana Lottery company and on
behalf of every form of gambling con-
ceivable-all are Just what some peo-
I pie want" and are bound to have either
openly or clandestinely Hence the pre-
ferred dividend error is going to die
very hard. But it ought to die, for all
that.
| The whole-life form of insurance Is
another hoary-headed error which will
die very hard, for it has hosts of prom
inent friends who are indefatigable in
their defense Of it. Newspapers, mag
azines and books, orators and actuaries
are busy crying UP its incompatible
virtues, regardless of the conclusive
testimony of the arithmetic and COM
mon sense to the contrary. A new
| book just out, and avowedly prepared
to expose the falacies and sins of life
insurance in general, and of certain
forms of 1t in particular, gives this bit
of oracular wisdom to its readers: "a
combination life and endowment policy
is where, in consideration of the policy
holder paying both life insurance pre-
MUM and endowment premium, the
company agrees to pay whether he lives
or dies" Then, after a sapient remark
or two, he adds these words, whose fall
sity | propose to demonstrates This
combination policy Is the costliest form
of life insurance protection" A con-
crete case will be the most conclusive
for our purpose here
Mr.. John Smith, young man TWEEN
ty-four years of age, having read @.
P.'s new book on life insurance, goes to
one of our best Connecticut companies
and takes out a $4,000 "whole-llfe poll
| ICY for which the company charges
him $211,70 per annui-., less annual div
idends His friend, Mr.. John Brown, at
the same age, takes counsel of his own
common sense, goes to company or
ganized in another state and takes out
policy for $4,000 which will mature
when he becomes sixty-hve years Of
age or at his prior death, and agrees
to pay an annual premium of $21O, less
annual dividends, for it. Both men
continue to live and to pay their pre-
miums year by year until their heads
are white and their families are scat
tered, and only themselves with their
wives remain. Up to this time the sit
uations of the two men have been ap-
parently very similar. The annual pre-
| lnlumS nave Detu pTdCllCdlly lueHIlCdl,
and the amount of their insurance ex-
actly the same. But when the forty
second anniversary of their policy ar
rives the situation changes wonderfully.
Mr. John Smith with a heavy heart
goes to the postoffice to mail his usual
check for $2l170, less annual dividends,
in order to keep his policy stlI in force,
His friend Mr.. Brown, takes out of the
postoffice a letter from his company
containing a check for $4,000, plus his
years dividend, and is a happy man,
we may well be assured, for he is now
an old man whose earning power has
become almost nil. But the $4,000 will
enable him and his aged wife to feel
tranquil, and really to enjoy the few
years of life which may still be granted
them. Poor John Smith, on the other
hand, having taken @. P.'s advice, is in
hard luck. True, he has $4,000 of in
surance in a good company and when
he is dead somebody will get the benefit
of it; in the meantime he must keep on
paying, or sacrifice. 1t has cash value,
| it may be, but how much? Only about
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