Evening star., 1927-04-04
MEN AND MONEY
By NJ. s. Rukeyser.
fCopyrishs. 1877

Massachusetts has applied the cash
and carry merchandising idea TO the
field of life insurance.
In that commonwealth, policies to
indemnify the insured against the
economic loss that death involves are
sold at reduced prices directly over
the counter. In 10 savings banks, scat.
tered throughout the State, policies
are sold to those who on their own
initiative come in and ask for them.
These patrons not only avoid the pain
OF dismal conversation with an insur'
ance agent, who seems TO be self
appointed advance agent for the grim
reaper, but they also save 20 per cent
allowed for selling expenses,
An individual can take advantage
of the cut rates at the insurance cafe
terlas in amounts up to $4,000. That
the system, which has steadily grown
during the last 10 years, has become
an important factor in the state was
recently revealed by an onslaught
against the system on the part of the
orthodox insurance agents who evil
IDENTIFY feel that they have been in
iured by the new competition. Ac'
cordingly, they petitioned the Legls
lature to limit the amount of savings
bank insurance to $4,000 instead OF
$40 600 The petition was rejected,
and in the hearings on the question
the novel experiment received wide
spread publicity and Endorsement,
Banks Are Supervised,
The State carefully superVises the
10 savings banks which have entered
the insurance field
Experience in Massachusetts indi-
Gates that self-selling bears more
permanent results than ordinary
high.powered sales by Jealous outslde
agents. The lapses have amounted
to . per cent on the business written
counared with 21 per cent on ofdl'
nary company business and A per
cent on weekly premium or lhaustflai
insurance business,
Under the law, single bank may
only sell $1,000 OF Insurance 20 an
individual. A prospect who desires
tha n,a vinaun coverage must take out
noIicies i'm all 10 banks. Ihe maxi
nun, would be raised as other banks
entered the field.
The Massachusetts experiment
throws light on the general pfonil,enl
of how to reduce the cost or distIipu'
tion. If you segregate the Wiliills
buvers YOU can bring down the costs
hv eliminating selling expenses. feF'
suading the unwilling Is expensive
and It is an open question Whethef the
convinced ought to share the expense
of converting the skepties'
In merchandising, where mass OF
sales and production have an effect
on the price OF the product, such an
easy solution would not work Thete
is economy in finding additional nuN.
ers. but even I'm selling commodities az
some stage the cost Of wooing the
apathetic, offsets the advantage TO be
gained,
Must Live In State.
The Massachusetts plan is available
only 10 those who reside or work IN
the State. 1t supplements but does
not supplant, the services offered by
regular companies through agents,
In general, the life insurance agent
performs an economic mission, and
there is little justification for abolish,
ing him. In bringing the idea OF
insurance to those who had over
locked 1t. the agent serves social as
we'll as a business function. lie can
also be useful in giving his client
expert advice as to which particular
policy fits his special needs.
Perhaps the Massachusetts, innova.
tion, however, will offer a model for
other communities, which wish to give
the sophisticated an opportunity 10
save money by acting on their own
initiative. In New York, the Ritz,
Carlton Hotel and the Automat exist
side by side. and there seems to be a
demand for the services of each.
Massachusetts, offers the same choice
In the insurance field, and the figures
show that each method has won its
adherents.
The country is still beset by the