The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-01-19
INSURANCE LOST IN
LOANS S5OO,OOO,OOO
Companies Say Policy Holders
who Borrow Abandon Big
Protection.
BIG INCREASE SHOWN
Report Places Central North
prn states Lowest on List
Of Borrowers.

An investigation Just concluded by the
Association of Life Insurance Presidents
into the subject of borrowing on life In
surancs policies shows that at the end
Of 1911 $4,000. 600 was outstanding In
loans to pollcyhoders. OF this amount
tho Pacific coast states borrowed 1000
per cent. OF the reserves. which amount
20 s2,Sb3, 0O0. 900, while the central North
ern States are lowest. with 18.4s per cent.
Robert Lynn Cox, general counsel for
the association. In giving out the report
said the figures are given to the public
IN the hope OF stimulating a study Of the
underlying causes OF the increase In the
practice OF borrowing on life insurance. 30
that remedies may he suggested.
These mortgages on life insurance poll
Giles have Increased from 3.3J per cent
Of the reserves in 1883 to 1903 per cent
In 1912. II Is believed that Is per cent
in outstanding at present.
Repayment OF Loans Rare.
Tho report predicts that benehciaries
will be deprived OF half billion dollars
OF life insurance protection as result
of the loans outstanding at the end OF
1919 Experience OF the companies has
shown that little of the borrowed money
Is repaid, most of 1t being wasted or
invested elsewhere.
Texas has borrowed moro on her ~.
serves than any other State. having
drawn e5.5l per cent. Next comes
Georgia, with 5000 per cent OF the
States which exceeded the average OF
15.as per cent. New York In near the
notion of the list with 1913 per cent
The smallest borrower Is New Hampshire.
with l19i per cent Maine and Rhode
Island follow.
grouped geographically. the central
Northern States, Ohio. Michigan. Indiana,
Illinois and Wisconsin. have borrowed
least The average for this group 10
l349 per cent The New England States
have borrowed 1919 per cent. The mid
die Atlantic States. composed OF New
York, New Jersey. Pennsylvania. Dela-
ware. Maryland and the District OF Co.
Iumbia, borrowed 1857 per cent
Northwest borrowed 1902 Per Cent.
The Northwestern States. Iowa. Minne-
sofa Nebraska, North Dakota, South Da-
kota, Wyoming and Montana. borrowed
1902 per cent The Southwestern States
Missouri. Arkansas. Texas. Kansas. Colo
RADIO. New Mexico and Oklahoma. Dor
rowed 1913 per cent. the South Atlantic
States. Virginia. West Virginia, North
Carolina, South Carolina Georgia and
and Mississippi States. Alabama Missis-
sipp Tennessee, Kentucky and Louisiana
l9.tl per cent.
Referring TO the increase OF policy loans
during the twenty-five years from 1855
20 1912, inclusive. the report says:
The year Of greatest proporuonate
increase was the year Of the panic OF
1929, when the loans increased from
3s.00o.O00 to nearly sl3.500, 900. while the
reserves increased but n little over per
cent. From this time TO 1906 there was
u steady increase not only in the amount
~ outstanding loans but the per cent OF
the reserves borrowed by the policyholders
Increased every year.
THE panic of 1907 caused . sudden
Jump from S24i533.605 TO S325.15l.354 in
the amount of outstanding loans, or nearly
one-third. while the reserves increased
only about per cent. Since 1908. while
the amount loaned has increased $50.
100000 or 100000 a year. the avera ge
rate Of increase in the ratio Of loans ia
reserves has been but 81 per cent. a
yeG, compared with an average increase
~ Is per cent. during the years from
1884 to 1906"