Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-02-19
NO SIGN Of REDUCTION
Life Insurance Premiums Not
Likely to Be Lower.
MAY INCREASE DIVIDENDS
Frank Statements by President Paul
Morton.
WHAT THE RATES ABROAD ARE
Question Of Reduction of Agents
Commissions Considered-Need Of
Popular Education on Subject
WHAT THE RATES ABROAD ARE
BY WILLIAM e. CURTIS
Special Correspondence of The Star and the Chicago
Record Herald


NEW YORK, February IT, 1906
In talking with the managers of the
great insurance companies do not find any
| indication that premiums will be reduced
or that the commissions paid to agents are
to be cut down. President Morton OF the
Equitable talks very frankly on this sub
jeet. When / asked him if there was any
prospect Of cheaper life insurance he said:
we are certain to increase dividends in
time, thereby decreasing the cost of insur-
ance. | have not vet been able to discover
mat premiums are higher than they ought
TO be. Premiums are about the same In
all companies and in all countries In Ger
many, France and Great Britain policy
holders are obliged to pay a trine more
lhah Americans pay, and the charges for
insurance everywhere are based upon long
experience and actuarial calculations
premiums could not be changed without
disturbing all Insurance. The cost will be
reduced indirectly by increased dividends
Inc pollcyholder will receive a portion OF
his money in the form of dividends
Dividends have not been realized as prom
lsed because the rate of interest has gone
down from and ! per- cent to less than
four and consequently the returns from
investments have been much less than was
anticipated. In addition to this there has
heel extravaganza in management. Never
theleSs. insurance is cheaper at the same
price today than it was twenty years ago.
because there have been a great many mod
| ihcatons in the policy that you buy. A
policy now has a surrender value after
three years; formerly if you surrendered it
you lost all YOU had paid in. You have
more privileges in travelling in tropical
countries, etc. Under a good many poll
CieS you have the right to borrow money
at . per cent, etc. In other words. while
there has been no great concession in the
cash premiums, the policyholder is get
ting more options for his money.
Law Fixing Minimum Premium.
France is considering the passage of
law fixing a minimum premium. The es-
sence of Insurance is safety. and 1t seems to
be the policy in France that the insurance
companies shall not be allowed to sell
insurance at lower rate than it ought
to be sold to carry out the contract. Sew
eral states now tax premiums, which
amounts to a tax on the savings of the
people who buy insurance. The dividends
paid by the Equitable last year would
have been larger if it had not been for
the state taxes. If federal supervision
could be achieved and at the same time
state control eliminated, l would be in
favor of il. ] do not care for both.
MANY people think that the commits
sions paid to agents for securing business
are too high This matter is receiving
careful consideration at the hands of the
no rebates can be successfully carried
out the first years commissions can I'M
doubtedly be reduced. Selling insurance
is like selling anything else, and the man
who does it successfully is entitled to fair
compensation for his talents and his labor.
Life insurance is very similar to saliva
ton; everybody ought 10 have it, but few
go after ii. They have TO be eXhorted to
take it,
| The Mutual Life people take the same
position. They say that there will be no
reductions in premiums, and that such a
thing is not possible except indirectly in
the way of an increase of dividends. which
they confidently expect will be consider
able because of economies and reforms
that have been introduced by the new
management Nor do they consider it
/ either advisable or practicable to curtail
the compensation of agents, because the
most of them have to work to make d
! living on the commissions paid at pres
emit Cutting down commissions by de-
ferring the payment of a part of them
to future years is not q real reduction
they say, but may occur in some COM
p3nies.