Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1917-12-11
INSURANCE AT
LESS THAN COST
Government Plan to Protect FAM
lilies of Soldiers and Sailors
Without Pensions
BY ARTHUR H. FISHER

eress which establishes the Bureau OF war
Risk Insurance partly because of general ie.
norance Of or apathy regarding the pr'ncin'es
and scientific practice which govern tho
proper conduct Of the great business Of life
insurance. and In considerable measure be.
cause Of the failure OF the Government to
exp'ain the matter properly
When discussed by the inexpert the tend
ency has been to assume that the Govern
ment Is necessarily in a position to furnish
life insurance 'over the counter" at rates
much lower than obtain with u well.managed
company. As n matter of fact the rates
fixed bv the Government 10 meet the pres.
ent emergency will not meet the cost Of this
insurance nor were they intended TO The
rates charged for the form of insurance now
offered TO sailors and )!d'ers are little less
than the rate charged civilians for similar
Insurance In many weilmanaged American
companies. To the extent that the excess cost
must be met out of the general funds Of the
Government. II is offered as a benefaction
1t Is beyond all doubt worthy benefaction,
to which every American citizen must con.
tribute. BY this means the nation can ex.
press Its gratitude 10 those uron whom Il has
called for magnificent sacrifice II Is also
a praiseworthy movement toward an AVOID.
ancc OF the manifold abuses connected with
our obsolete pension system. There Is every
reason why the true purpose OF this new de.
parture on the part of the Government should
be thoroughly appreciated and why every
soldier and sailor should avail himself of
every dollar Of this Insurance. he IS able to
obtain.
- rf
surance In wartime further provides that
I'VE years after the conclusion Of hostilities.
the soldier or sailor holding a contract for his
war life insurance, which Is virtually term
insurance. may. regardless Of his physical
condition. convert the same I'm like amount
into permanent Insurance on the life or en-
dowmcnt plan. on the net American So pcr
cent reserve basis Here again will this in
surance partakc of the nature Of a benefac-
ton, for inasmuch as there will be no medical
examination demanded. Il follows that IL tho
war is to bo OF considerable duration, the
proportion of impaired lives will be large.
and the mortality under these converted risks
VIII In all reasonable probability be equal to
or in excess of that provided for I'm the Amer
lean mortality table. Such deficit as NAV
occur duo to excessive mortality. together
with the entire administrative expense Of tho
insurance Bureau, except as excess interest
on reserves might be available, must be met
out or the general funds Of the Government.
such funds can Of course only como from
general taxation. Here again the American
public will show Its gratitude to our fighting
lesions. Tho extent Of this deficit will nm
doubtedly receive due publicity at tho proper
time.
The Government Bureau Plan
comments have been made calculated to
lead to the conclusion that an extension oP
governmental insurance was contaminated
makins tho service available for civilians
ai,er the war as well as for soldiers ano
sailors. This extension, however, was In no
way considered or suggested In the act of
congress for tho sole purpose Indicated bv
IT'S name. and furthermore an extension Of
I.s Services 70 civilians would create bureau
1auically oinerent from the existing bureau
A governmental bureau for civilian ,nsur
ance has existed in England for MANY wears
although few Englshmen arc aware of i,a
existence. Its benefciaries are chiefly n few
department employees. IT has been tboroueb
ly demonstrated in England that the nnhIic
wiz not buy insurance except through the
earnest solicitation Of tho inevitable and in
defatigable agent '
Ihe wisdom Of establishing an American
hoi tifilldl INSURANCE certainly needs
careful consideration by men who viii 90
deeply into the history Of life Insurance "A
practced by tho worthy companies. ipsur-
anCe is iar beyond the experimental stage
ana mas become an exact science. Iven il
such "A bureau were established, and nothing
be spent for the procurement Of busInnss
eitler IN commissions or publicity the OK
penso OF administration would still remain II
Is difncult to see how there could be any
saving In administration as against thar n,
anti
Government donated these expenses TO tn.
bureau. Would this mean cheaper insur-
ancer Probably not. It would simply mean
subsidized insurance.
1t Is not improbable, to say the least that
the mortality Of those insured by such
bureau would be higher than that of these
insured by u well-managed company while
the interest rate would certainly be lower
both these elements would more than likely
counterbalance the apparent savings In com
missions. 1t is difficult to see therefore. any
saying in net cost which could be obtained
by such bureau. whilo higher cost is well
within the realm of possibility.
Let no one be allowed ignorantly 70 con-
fuse the present Government rate for Its tenn
porary wartime insurance with its after
the-war rate for permanent insurance A
soldier or sailor aged twenty-five Is now
charged s7.s2 per $1,000 for his war insur-
ance on the temporary plan. Five years after
peace is declared, supposine the war 10 have
continued for three more years, this insur-
ance would have TO be converted 10 a per-
manent plan. II the ordinary life plan be
then chosen the ex-sodier or cX-sailor would
be called upon to pay s1s.73 per $1,000. As
has been pointed out, the Government paws
all expenses. hence 1t is able to provide this
protection to It's fighting men at cost
slightly less than the normal cost to civilians
in a well-managed company.
Met Great Emergency
Were the officers. directors or trustees OF
our great American life insurapce companies
to attempt to render such o service TO SOL
diers and sailors they would be placing in
jeopardy the most sacred financial trust that
exists today. "a trust that represents he YER,
bulwark or our economic we-being For the
Government TO create such a benefaction calls
for naught but praise For the companies to