The Birmingham age-herald., 1913-07-03
LETTERS TO EDITOR
Policyholders and Companies

To the Editor OF Ihe Age-Hefalu.
In recent issue of your paper I no.
ticed an editorial reference to the pub
lshed figures showing the amount of
payments to policyholders in a Calendar
year by the various life insurance COM
panies of the country. At the same time
you intimated that it would be interest
ing to know just how much money in
premiums was paid by the policyholders
10 these companies during the same time.
You also mentioned the fact that it is
generally thought by the public that its
insurance is costing too much or that it
is being charged great deal more than
the actual cost of the protection.
Ii is "a fact that the general public
seems to have the idea that it is being
fp ! up on its insurance in all lines. 1t
IL lot SO much fact that this impress
sion is correct. Notwithstanding thu
teachings of some politicians and others
with axes to grind at the expense of the
public and legitimate business there is
about as keen competition in the insur-
ance business as in any other line and
perhaps a very great deal more than in
any other business of equal magnitude.
This fact alone should indicate that the
public is getting a pretty fair deal with
the insurance trust exists only in the
mind of those ignorant of the business
and some few persons who profess to
think they have been mistreated by an
insurance company in some particular in
stances.
To get fair idea of the ratio of pre-
MUM payments to the life companies by
policyholders and the returns by the COM
Il laa
game period we will take the experience
of those companies in the United States
with an $10U,00o0 GOO of insurance or more
In force. AT the close of 1911 there were
10 such companies, excluding those writ
ing industrial business.
We lind the following figures from their
sworn statements
Premiums received ...........$ 365, ,S32. 40
Interest and other rects..... 1H9Os,163
Total income ..........,...... .$olO, 740, $500
Death claims paid ............$ 120 700, 993
Matured endowments paid. F279,o6i
Paid on surrendered and lapsed
policies Observation-Disclosures. g., ,654,2 $50
Dividends paid policy holders. 65,6Sl ,sl6
Total paid policyholders or
their bencficiaries ...........S 296 316, ,153
Placed to credit of polcyhold-
sis IN increased reserves -. ia li309,Si6
Total paid polcyholders or
placed to their credit $40 625, 499 90
Leaving for expense of man
agement, profits to share
holders and increased sur
plus 500 ll5, ,O14.0o
OF course the expense of management
OF sucli a gigantic business runs way
into the millions. Many millions of this
last sum are carried to surplus account
4, set aside for future dividends to
policyholders. Several other millions were
paid In licenses and taxes.
s IT will be noticed from the above fig
ures that the policyholders of these COM
pabies actually received or had placed
to their credit just si41s3.1Ss more than
they paid in to the companies as pre-
miums, which amounts to more than 10
|, per cent on their Investment, If you care
to call ii such.
One of these companies actually paid
to poieyholders or their beneficiaries over
s. 090,000 more than policyholders paid 1t
during the year, a fact which is not gen.
orally known even among insurance men.
This company has had this experience
now for four years in succession.
The 10 companies whose figures are
used here had at the time mentioned ap-
proximately 10000,000 of outstanding in
surance in force with aggregate assets
of more than $1,000. 00000O over two and a
l,alf billions of which is reserve which
the laws compef them to maintain in tact