Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-05-25

amount Of insur-
ance written to G.. A. Price.
cover bus ineSs
firms. In his opinion this is the great
est field now open to life insurance men.
The life insurance mans principal
function is to enable his client to Gre
ate an estate, and the trust mans prin-
cipal function is to conserve the estate
this created, he said. Mr.. Price further
asserted:
Since the primary purpose Of life
insurance is to take the place of earning
power, 1t should be used to produce in
coue-income that is as assured as
possible, but controlled in such q way
as to be flexible enough to meet possible
equal importance to life insurance itself.
therefore. is the proper conservation
and management Of its proceeds. It Is
one thing to provide for dependents
through life insurance. but it is an
other to know what these dependents
will actually receive and how they will
receive it, Recognizing this as 4 serious
problem, most of the life insurance COM
panieS now offer several settlement OPP
tions to the assured whereby he may
designate, under the insurance contract,
certain definite forms of payment which
cannot be altered by his beneficiaries.
In many cases this plan has distinct
advantages, while In numerous other
cases greater nexibility is desirable.
New Settlement Methods.
"The possible methods of settlement
under any policy of insurance now Of
fered by insurance companies are as
follows:
Il. Immediate payment Of the in
surance proceeds to the beneficiary in
. lump sum.
y. The insurance company retains
the possession of the insurance proceeds
and undertakes to pay a specified rate
of interest to the beneficiary. This Is
called in insurance parlance the inter
est option
"3. The insurance company. in ex-
change for the right to receive the in
the beneficiary each quarter, or at
other stated periods, specified amounts
for fixed number of years (the linn
tied installment settlement.
a. The insurance company, in ex-
change for the right to receive the in
surance proceeds, contracts to make
periodical payments to the beneficiary
for life annuity.
IS. The insurance company, in ex-
change for the right to receive the in
surance proceeds, contracts to pay the
DeIlSllCkhTy 6tdtSu ulSLdil6utctlLS 1OT a
prescribed number OF years, after
which, If the beneficiary is still living,
payments under an annuity for his
lifetime will begin. In other words.
such settlement options called INSTALL
ment certain and continuous settle
ment, represents . combination Of No.
and No. T."
How Banks Handle Trusts.
The corporate nduciary does not
guarantee a specific interest rate. AS
trustee 1t receives the proceeds of in
surance as a trust fund for investment
in securities which it holds as q sepa-
rate and distinct corpus or trust estate.
It's powers OF management in respect
to investment may be narrow or broad,
depending on the extent of authority of
discretion given in the trust agreement
Both the insurance company and the
trust company are regulated by State
laws for the protection of the benefi-
Charles. The trust agreements executed
by corporate dduciarieS must conform
to all statutory provisions, but these
legal protective provisions pertaining to
trusts permit very broad discretionary
powers to be conferred upon the trustee
by the insured.
The life insurance trust has been de-
vised to accomplish one of the principal
purposes for which life insurance pro-
ceeds are intended-complete protection
for the beneficiaries through expert
enced and efflcient management Of the
insurance funds in trust. Under this
plan you provide that the proceeds of
your life insurance be payable to trus-
tee-generally q trust company. In
creating such q trust you consolidate
under expert management the respon-
sibility for the conservation and proper
investment of the proceeds Of your life
insurance, the distribution of the income
therefrom, and the ultimate distribution
of the principal-exactly in accordance
with your wishes as expressed In the
trust agreement.
Not only does this provide for proper
management of the proceeds Of your
insurance, but 1t also relieves the bene-
ficiaries of worry, uncertainty and re-
sponsibility in connection with the ad-
ministration Of the funds you leave for
their protection: and it eliminates the
possibility of unwise investment or IN
iudicious handling of the funds on their
part"
All Travel Thrift Highway.
Leaders in the insurance profession,
Mr. Price concluded, ARE confidently
predicting the time, within the next
decade. when life insurance written
solely for business purposes will equal
the insurance carried by business con-
Germs on combustibleS. That may seem
like an exaggeration, but II one analyses
the need for business life insurance the
prediction does not seem ut all unlikely
Of fulflllment.
We in the trust profession believe
we have the best goods on our shelves
of any institution serving the American
people. Our friends in the insurance
fraternity are no less proud of their
achievements and prospects. But when
all Is said, We travel the same road
The Highway of Thrift. We go hitch
hiking together to our mutual prof1t
because we are leagued together to
promote the security and happiness OF
mankind"
Record Attendance Present
r. p. H. Siddons, chairman OF the
section, presided and the attendance
made a new record. Harold ID. krant'
new president of the District Life I'm
derwriters' Association. brought greet
ings, as did Edward ]. McQuade. sec
rotary of the District Bankers Associa-
ton. Earl d. KrewSon. chairman OF
the underwriters committee on trusts
was a special guest.