The citizen. (Honesdale, Pa.) 1908-1914, 1912-10-23
MODERN WOODMEN RATE
QUESTION
Should Old Members Be Rated at
Entry Age or Attained Age?


Entry Age or Attained Age?
The Modern Woodmen Bulletin in
its first October issue has the follow
ing to say in explanation Of the rate
controversy within the Modern
Woodmen OF America:
Reduced to its lowest possible
terms, the Modern Woodmen rate
question is the question of whether
the members should be rated at en-
try age or at attained age.
This is a question the Society is
entitled to decide from the stand
point of its own interest, unless the
member has a legal claim arising
from his contract, or an equitable
claim arising from a contribution ex-
ceeding what it has cost the Society
to carry men of his class and leaving
a profit which should in justice be
applied for his benefit.
No legal claim arising from the
contract is admitted. With respect
to equity, the situation is that the
older members have contributed no
part of the surplus now in the hands
of the Society. This represents a
part of the excess contributions of
the younger members. The payment
of death losses among members of
their respective ages has consumed
all the older members have con-
tributed to the benefit fund and
more.
If what the older members have
done to build up the Society has
created a. fraternal obligation, the
Society has sought to discharge it by
making to them the most liberal con-
cession consistent with its own safe
ty. 1t poposes to load" rates for
younger members in order that it
may carry the older members at
rates which will create a deficiency
of 22,500,000 in their contribu-
tions if their certificates mature ac-
cording to the Modern Woodmen
mortality table.
No member, young or old, will be
" frozen out" No member need
contribute a dollar to the reserve
fund unless he chooses to do so. He
may take the step-rate, which is the
current cost rate. Under this plan,
his rate up to age SO will be lower
than under the old plan. Or he may
take term insurance to age so, 60
the whole life level rate. Term in
surance was all he had in fact under
the old plan, which meant that the
Society would run along for an in
definite term, but ultimately would
be swamped by it's liabilities in ex-
cess of contributions. The step rate
for the member "a years old is 81 .O5
per month. The whole life level rate
for the member "a years Of age or
over is $500 month. If he
chooses he may pay 50 in cash and
have 81 charged against his certifi-
cate. So no member who is quite
candid with himself will say that the
Society has frozen him out by offer
ing him no plan his circumstances
will enable him to accept.
Some profess not to understand
how the member who has paid all
that has been demanded of him all
these years, and has matured no
claim, can be said to have created a
deficiency. This might be illustrated
by citing the case of a mutual fire
insurance association. If this asso-
citation insures farm dwellings and
lumber yards, and if the lumber yard
fires cause losses in excess of con-
tributions from the lumbermen, the
fair conclusion is that the lumber
men as a class have not paid the
cost of their protection to the asso-
citation, though not all the lumber
men have had fires. II the associa-
tion should now propose to raise the
rate on lumber until 1t Appropriated
the cost of the protection, and the
lumbermen should object that they
were being unfairly treated and
frozen out" they would occupy a
position corresponding to that OF the
Modern Woodman who objects to
the present readjustment of rates.
This comparison is imperfect. 1t
is not certain that the complaining
lumberman will ever have a fire, but
it is certain that every certificate is
sued by the Modern Woodmen So
ciety will be matured by death unless
the member lapses. 1t is therefore
the Society's most imperative obliga-
tion TO make provision for meeting
these claims as they mature, and it
can meet them only through con-
tributions to the benefit fund by the
members and interest accumulations
on this fund. The member who join
ed twenty years ago is twenty years
nearer death then he was at entry
age, and If the Society should blink
this fact it would merely deprive it.
self of the power to meet its just
obligations. The complaining mem
bers seek a special privilege or dis
elimination in their favor. They
have abandoned the Jeffersonian
doctrine to which many OF them have
professed devotion, the doctrine by
which the Society stands and for
which all truly cooperative institu-
tons must stand: Equal rights to