Evening star., 1937-01-01
SECURITY ACT HELD
AID TO INSURANCE.
New Groups Expected to
Become Acquainted With
Annuity Benefits.
by Cambridse Associates)

Icy CdmDflukc hSSuSiatcsJ
With the advent of the new year
q new competitor enters the insurance
field-a competitor with resources be-
yond estimate, with an agent wherever
q post office dots the United States,
and with the express power to compel
the great majority Of wage earners
to sign on his dotted line. And yet
insurance underwriters generally are
prone to regard the entrance of Uncle
Sam into the business of furnishing
protection as more likely to add to
the number of insurance holders in
private companies than to subtract
from them.
Certainly the approach OF the date
set for exaction Of social security con-
tributions from employees brought no
indication that the sphere of the pri-
vate insurance company is to be cur
tailed. New life insurance amounting
to $7,133, 3,159, 900 was written in the
first IL months of 1886. The same
1885 period, for special and nom
recurring reasons, showed new in
surance totaling $7,341, ,224,000, only
2.83 per cent more.
Increase Il Envisioned.
Just as the Federal thsater projects
have benefited the commercial theater
by bringing to q new public the de-
lights of the legitimate stage, the
social security act is expected to give
vast new group Of people q con-
ception Of the possibilities OF in
surance. Insurance men generally
envision steady, well-defined in
crease OF interest in insurance gen.
orally and in old-age annuities in par
ticular, since to many, especially in
the middle income classes, the scale of
weekly benefits under the social Sc
curity act appear SO inadequate.
A significant trend worth noting is
the growing tendency for individuals
to purchase life insurance for special
purposes. This broadening of the
usefulness Of insurance has come
about, in part at least, because of
higher estate and inheritance taxes.
Through insurance it is possible for
individuals to make sure that suf-
flcient cash will be available to meet
the immediate charges against their
estates and so avoid losses that might
otherwise be incurred through a forced
sale of assets.
Tax Advantage IL Factor.
Another factor impelling an increase
in the amount Of insurance carried
by the well-to-do Is the tax advantage
gained in certain instances by the
life insurance estate.
Insurance planned to take care of
educational expenses or to provide q
business footing for q son or daughter
at a certain age has, of course, been
common for many years, but, under
the stimulous OF the uncertainties OF
the recent past demand for insurance
for this purpose has been substan-
TALLY stronger.
The strength Of the private life in
surance companies today is strikingiy
revealed in q recent survey of the in
vestments Of 40 companies holding
% per cent Of the total assets of all
legal reserve life insurance companies
in the Nation. Over one-hAlf the
assets of these companies are invested
in Government and corporate bonds,
approximately one-fifth In real estate
mortgages and the rest In real estate,
policy loans ana miscellaneous assets
Altogether holdings protecting the
policyholders In these companies are
valued at approximately $23, ,000.-
000, 900.