Bisbee daily review., 1913-12-12
INSURANCE FACES
 GREAT INCREASE OF MORTGAGE PERIL
Officials Say Loans to Policy Holders Throughout the Country Are Encroaching On Reserves

gazing of life insurance policies by policy holders throughout the coun- try are being considered by the As. soeiation of Life Insurance Presidents, which opened it's Seventh Annual con. vention here today. About three fourths of the insurance in force in American companies Is represented By the executives in attendance. More than five hundred and fifty mil lion dollars have been borrowed by the philosophers from the reserve funds, which amount to about three and a half million dollars
 One suggestion submitted to the convention today Is that loans on pol icies should be made with promise to pay at a definite time At present about only one loan in ten is repaid the result being that the insurance protection is permanently reduced in the majority of instances where loans are made.
 Figures presented to the convention slowed that mortgages on policies had increased from 9 1-3 per cent of the reserve in 1888 to IS per cent in 1912. and probably will reach IS per cent this year.
 Tn subjecting this fund to loans, said Arthur E. Childs of Boston, Mass. life insurance companies have left 1t open to any whimsical desires of the insured and already too seri- ous inroads have been made upon it The temperament of the American pnbiic differs. from that which ore finds elsewhere. This country is a new country where development has been very rapid. where opportunity to make money is ever presenting itself and where the ruling ambition is to this tendency naturally and easily leads men to desire to avail them selves of all ready means to procure funds to put into such inyitging vent ures. Therefore, it tehooves the in- surance companies to guard their in seurance funds against the rayages of such a temperament
 We have in th.s country an eX- travagant public. probably the most extravagant public in the most eZ travagant age. The very people Who are living up to and even beyond thor incomes, depending upon their insug, ance for the future protection Ci their families. are the very people who are mortgaging their insurance just as soon as the deposits are large enough to satisfy some of their more expensive desires. They either for get the original purposes fer which they took the insurance or they al. low their selfish desires for tempo. rary enjoyment to outweigh their ap. preciation Of the necessity for pre- viding for the future. Under such conditions the best interests of the public demand that We make it more dicult fer the insured to hypotheclte these funds.
 Our present system, moceovtr, Cf granting loans upon demand is appar. ently so incompatible with the otLor functions of life insurance that change in the system .s Eecessary from the standpoint of tie companies themselves.
 Twenty billion dollar Of lnsur. ance in force is provided by the ljG companies organized in ;his country, 5nd upon the satisfactory maturity ,f these policies stands tie success Of the insurance business.
 The companies have accepted these obligations, not with the expectation oC being called upon to ful;il! them tcday or tomorrow. but with the idsa taat the majority wIll run for many years. It is quite ns :sssary tien. in urder that the ccmpanies may be assured of their aJil'Jy To fulfill htese contracts when they fall due, that they be allowed to invest their funds in such securities as will give an adequate return Overa long pericd cf years and yet at the same time Of fer sufficient guarantee for future maturity"
 Life insurance as an Aid 10 Bust  ness was discussed in paper pre- ared to George 1. Cochran of Jos An nyeies. 'Cai.
 Until within recent years life in surance has been urged largely as means of domestic protection" te said. However. a new field has now opened up, and life insurance is being urged as q protection for business interests. The principle of insurance in business Is universally approved as far as fire insurance is concerned. but only partially in regard to life insurance, and yet it would seem that the loss of the manager of a business by death is just as serious as the loss of the property Of the business by fire; and the prudent man would do well to protect himself against tptks fi<I.sAg4S avn fepihicn k3thA the principal tse Of business insur- ance is to insure the life of the part ner, ocer or employe to the extent of the value which bis life represents to the business. whether such business is incorporated or carried on as a
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