New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-12-15
p0uCYHOLDERS BLAMED
They Waste Near $780, 100000
Yearly. Judge Day Asserts.
"REFORM HURTS BUSINESS"
Life Policy Loans Bring Chagrin,
President Taylor Says-Cox
Admits Legislative Errors.

Tho problem Of life and DEATH a. meas
ured bv life insurance men, were pointcdly
touched upon yesterday afternoon by OK
Judge William \. Day president vi the
/ EQUITABLE Life Assurance Society, In an
address to tho Association of Life lnsur-
anco Presidents. Yesterday was the sec
ond and hnal day Of the fifth annual meet
ing Of the association which It has been
holding at the Hotel Aston. President Day
presented some of his most eloquent figures
! in the following paragraphs:
The average policyholdcr. while right
fully denandinG the highest degree Of en-
cheney ana economy i'm the management %
his own company, seems TO fcci that MS
duty and responsibility end with the pay
/ ment Of his premium. Satished win mo
soundncss Of his company. he puts ms
1 policy away, and the subject OF HE III
| surancc drops from his mind.
! As "A result OF this indifference ana ldcR
of personal attachment and loyalty TO thelr
companies, the policyholdcrs themselves are
directly responsible for a large proportion
| o. a waste which aggregates easily $780,
| 100000 annually. This loss comes from
needless borrowing of reserves, unneces-
sary lapsng, unreasonable taxes ana eN-
, Cessve loss of life que TO reasonably pre-
ventable or postponable causes.
The American people have provided them
selves with SIG 0W,WOOD OF legal reserve
b UfC nSuTance-nOl voluntarily, UpN uttdt
they have asked or demanded II, but be-
cause of the earnest intelligent and per
sistent urgings and appeals of the life IN
! suranco men of our country.
! III We can excite the pohcyhoiders IN
tereSt in the value of conservation and
the evils Of extravaganza and waste, and
keep his interest alive by continuous
educational campaign, why should we nor
be able to rouse him and impress hlm SUM-
! GENTLY To minimize evils which hc alone
/ has the power TO correct?
! We want them TO know of the waste that
| results from the abuse Of the policy-loan
| privilege-that by borrowing A35 100000 on
! their policies they have reduced their fami-
| lies protection and neutralized the very
purpose of their insurance To that extent
! and that they are spending nearly s@.WO,0J0
| annually for the use Of this money.
| We want them to know that they are
paying over s12OO0,0OO annually for taxes
on their premiums most unjust penalty
upon foresight and prudence, which should
| and can be reduced to a reasonable sum II
! they will interest themselves in the mat
ter-and that ii can be reduced in no other
! way.
We want them TO know that $4,000 600 is
| a reasonable estimate OF the annual waste
OF their funds due to deaths from causes
| ttat are preVentablc or postponable by the
application of ordinary and well known
rrecautions-and that they alone can re-
duce this waste.
Dr. \. J. Macdonald. editor Of "Tho
Toronto Globe had something especial to
say in the morning in favor OF interna-
tional arbitration not only as a prescryer
but as a prolonser Of life since wars
checked tho physical evolution Of d race.
And the subject of public health from the
Same point of view was discussed by Dr..
Oscar Bowling president of the Louisiana
State Board OF Health, and DR.. Luther
Halsey Quick, director of the department
OF child hygiene Of the Russell Sage Found
alton.
In general discussion following Prcsi-
dent Days address John NJ TAYLOR, pres-
dent OF the Connecticut Mutual Life Insur-
ance Company Of Hartford, severely crit-
csed the reform legislation IN this state in
1906 which obligated all life insurance com
panies doing business here TO lend money
10 policyholders. Said he:
One of the most unfortunate things that
has ever happened in the history of mimi
cal life Insurance legislation was that
statute written I'm the acts OF New York
up al Albany in 1905 which compelled your
companies and all companies. doing bust
ness in this state 10 make loans upon their
contracts. Nine states OF the Union, gentle
men. have followed that precedent, and We
must comply with the law If We are going
10 transact business I'm those states.
That law may be unconstitutional. SUP
rose II IS, and it is 80 declared But. Ike
the statute preventing the removal Of
causes 10 the federal courts, which has
been declared unconstitutional i'm ten cases
IN the United States Supreme Court. there
is the final umpire the insurance superin-
tendent or commissioner. who, despite tho
unconstitutonality of the law. says TO tho
non-state company comply with il or /
viii cancel your license" So we are per-
feCtly helpless so far as declining TO make
these loans upon that class of contract in
certain states is concerned
We all know too Well by experience the
objections to this class of obligations. They
are written IN our everyday history: they
stand square across the true interests OF
every life insurance policy that is written.
They bring nothing but chagrin and dis
appointment and distress To widows and
children, when the agent comes with the
draft in hand TO settle the fathers obliga-
ton or protection of 5000 or $4,000 and
takes out 5000 'or $500 Of it and leaves
them a pittancC.
Robcr; Lynn Cox, general counsel and
manager Of the Association Of life Insur-