Los Angeles herald., 1909-06-24
UNEXPECTED BENEFITS
More Voluntary Concessions to thousands
of Policy-hOlders by the Metropoh-
tan Life Insurance Company

remarkable spirit of lberality toward its
nolicv-holders is again the striking feature OF
the periodical statement or report or the
METROPOLITAN Life Insurance company SUM
mary of which is published this week.
The attitude of this great financial organi-
zation toward the millions of individuals who
have relations with it invites comment ana
affords some grounds for interesting comparl-
sons.
Broadly speaking, the inducements offered
by responsible life insurance companies TO
insurable persons are of two kinds. one con
sists in a proposition to carry dennlte amount
Of straight insurance at low cost; the other
offers innumerabe plans by Whleh IN return
for excessive premium payments the person
insured is TO participate in the earnings OF
the company, receiving benefits that are not
definitely stated in the policy itself. The hrst
plan appeals to the man OF Judgment as
clear-cut business contract under whlch an
oblgations are mutually understood. The 9TH
er appeals to the speculative instinct, ana
demands a higher degree of confidence IN the
insuring company, which carefully AVOIDS an
absolute guarantee Of Dement'S proporuoneu TO
the high rate demanded.
The Metropolitan Life sells straight IN
surance only; that is, 1t promises TO pay at
fixed sum plainly written in the contract. AS
a matter of course 1t must sell this insur-
ance at a cost low enough to secure business
in competition with all the big insurance COM
panies Having issued such policy, the COM
nanv has no further obligations under its
terms until the specified benefits are due ana
payable. The person insured Is satisned win
his contract and expects only that II VIII ne
exactly carried out So far as we know any
great financial or mercantile organization
would consider such a contract final.
But at this point the Metropolitan Life
chooses to temper hard -and-fast business meth
DDS by injecting a little soul into It's arter
relations with the man who holds It's policy
It must be kept In mind that the actual
cost of insuring a life can never by any hu-
man foresight be calculated in advance with
absolute exactness. The death rate in
given population varies from year to year;
the earnings of invested funds are bound TO
he greater or less through periods of prosper
ity and depression. the cost OF operating the
company's business viii each year bear
different proportion to the number and value
of policies in force. Insurance must be sold
at price based upon its probable tuture cost
under these varying conditions, and the SAFETY
Of the company, upon when an us pohoy-
holders depend for protection, must be as
sured by estimating the cost as high as past
experience has proven necessary:
The business of the Metropolitan Life has
increased tremendously year by year. while
It's operating expenses, proportioned 70 the
vast amount Of insurance carried. grow stead
ily less Ordinarily the resulting gains would
be considered a legitimate reward OF enterprise
under capabie management in which the pol
icv-bolders have no interests but this particu-
lar insurance company chooses to share Its
prosperity with them by paying bonuses and
The report just issued makes remarkable
showing
The company in ten years mas feuuced tne
ratio os expense TO premium income on It's
business in all departments 10 per cent. In
the Industrial department alone the reduc-
tion accomplished in the past fve years
amounts TO per cent-this last item repre-
senting a total of three and a half million
dollars.
THESE great gains are being used to increase
the benefits 10 per cent on all policies in force
since January l. 1907.
AZ 10 policies dated previous to January l,
1907 n bonus of per cent Of the premiums
is given for year on all policies over five
wars old. and increased benehts are allowed
an nolicies Of long standing which become
death claims.
10 sum up these benefts-not promised TO
nolicv-holdsrs nor expected by them-it Is
shown that during the past sixteen years the
concessions and bonuses in the industrial de-
nartment alone are equivalent to a gift out
right Of eighteen millions OF dollars