The advocate. [volume] (Charleston, W. Va.) 1901-1913, 1911-06-29
FRATERNAL INSURANCE.

1t was with a sense Of keen disap-
pointment, the feeling one expert
ences whose suddenly aroused hopes
have been as suddenly blasted that
the last word of the editorial opin-
ion Of the Mcdowell Times on THE
Real Question Of Fraternal Benefits
was read. The fault is not in what
the Times said so much as in what
1T failed to say upon this subject Of
vital Importance to a large number
Of Negroes in West Virginia a:.o
the Nation.
The Times fell short in that It
neither specified nor emphasized the
dangers which threaten fraternal in
surance as it is being conducted by
the societies doing business among
us.
At the outset it may be stated as a
maxim that insurance rates must
be based on the normal death-rate,
with enough added to defray the cost
OF management. More specifically
stated, the rate must be such that
compounded annually at IL per
cent for the average life Of the in
sured at the age of twenty-one, it
Will equal the face of the policy and
the cost of management. The test
OF the soundness of fraternal IN
surance, says an authority, lies ir
whether or not it answers these re-
quirements.
DO our fraternal insurance soc1e-
Ties measure up to this standardH
apparently they do, but not in real
1ty. Take the knights of Pythias-
singled out merely because this or
ganizatton is the leader in fraterna}
insurance In the State--as an illus-
tratlon. This society assures its pol
Icy beneficiaries 5000 in case of
death during the first year of men,
bershlp and an increase of an addi
tionl $4,000 after each succeeding
year till maximum of $4,000 has
been reached. For this the insured
pays $500 per annum.
IL this rate were applicable only
to members at twenty-one and if if
were invested at 1-2 per cent COM
pounded annaully for forty-one and
half years the American mortality
tables show the average exAscta-
t1on Of life at twenty-one, there
would be no question as to the sta
b1lity of Pythian insurance. But
the facts in the case will not war;
rant any such faith. The truth is
mat members are admitted from
eighteen to tifty-five at the one fiat
rate of $500 per annum, though all
are entitled to the same benefits. and
II IS also true that up to the pres
ent tlme---tifteen years after the es-
, taollshment of the Endowment De-
partment---the interest received
from the Endowment fund is AL
most negligible
Under this policy Of treating all
entrants alike and depositing the
premium money without interest
State OF affairs has arisen which
foreboGes i'll for the Pythians and
all other traternal insurance COM
panles conducted along similar lines.
For the first fifteen years, if condi.
lions - favorable, all will be AS
merry ID honeymoon. Then the
disbursements will begin to apDroacb
the receipts. In the next stage thew
VIII exceed the receipts and tie COL
lapS@ Will follow shortly.
What is here said is not said win
the intention of embarras ing any
ore OF our fraternal insurance CO.
cletles, but rather with the h,n,,
that, the danger having been poi1ted
out, provisions will be made to avoid
i. If the policy holders are mind
tai OF their united and III liviS:.a,
Interests they will consent % nc hal;
way: measures of relief, but will in
E st upon their organizations berg
placed upon firm financial basis
one that viii stand the acid test of
time. ~.
-aa.,
AS TO RACE LEADERSHIP
An inquiry has been ma ir, as VIII
y" seen from a commune atiUn which
appears on this page, what the oDin