Year: 1875




| unsubstantial characteristics OF those whicn
have toppled down in ruin. COntrasted Win
this system, we have in life insurance an IN
terest bearing fair comparison in respect 10
the amount of money involved, and assuming
a greater risk than any necessarily connecteu
with the business of finance and banking; but
standing to-day as whole on an absolute
basis of security which no man In his senses
need question. The science of finance has the
advantage over that of life insurance OF being
considerably older; but the contingency that
both systems have to provide agalnst-the
sudden demand for large amount of money
is more calculable element with the latter
than the former.


Chiefly, as we believe, because no Govern
ment interference has thwarted its growth or
fixed its direction, the business OF lie lnsur-
ance, after undergoing several remarkable
changes, has arrived at fixed and important
law of its being. This is, that experimental
methods of insurance are Of temporary dura-
ton, and that the business naturally reverts
to its simple, original form. There are several
noteworthy exemplifcatiOns of this law. One
of them is the experience as to making loan
to the insurer. This was pushed to Its limit
by companies permitting the payment or halt
the premium in notes. The plan was safe, IL
prudently managed it really gave more insur-
ance for less money in the earlier years OF
policy, and whether it did for the whole term
was at least debatable question. For many
wears this method of insurance had great sue
cess After a while its place began to be
taken by plan of One-third instead or one
half loan. Next, the notes for the loan were
generally dispensed with by the companies
that granted it. At the present day there are
many companies that make no premium loans,
and the tendency OF the rest is In that direc-
ton. The arguments on either side remain as
before the business of its own accord reverts
to the simpler form.


The plan of insurance that was whimscally
named endowment" has led the companies
through similar experience. 1t began with
the theory that the head of family who is In
sured for the benefit of some of its members
is likely to be as much in need as they are
when he reaches old age. Hence an insurance
payable at death or in advanced years might
serve a double purpose of security. This KIND
of insurance grew rapidly in favor, and the
constant tendency of it was to shorten the
term of the policy, which came down to ten,
seven, and even five years. The most of real
lfe-insurance has its origin in an unselfSh
motive, but this was evidently untrue OF
| nearly all the policies payable to the insurer
after term of five or ten years. Inc en-
| dOwmentn business reached It's acme shortiy
after the close of the war, and has been ever
since declining, till now that form Oh polcy
| is comparatively rare.


Among the many experimental forms OF lp-
| surance which have failed to keep permanent
place is the attempt to take risks that are
| of an inferior character at rates that
ore higher than the average. That
ne,,ple :. in feeble health, constituting
what \are\ called impaired risks" are
insurable> at so1se rate or other, is, from a
mathematical point On view, unquestionable !;
from a philanthropic point, desirable; from
business point, not impracticab.e' Du' "neh
attempted in this country it has ai'."SS gwen
way before the simpler kind of insurh- &C. ~
New-YOrk company, formed with Wow w
make this class of risks specially, after>a
few years trial abandoned it. A. ANew-England
company that still continues it has limited 1t
to the few cases where the applicant can be
examined at the home Office ant the Presi-
dent of the company himself grades the risk.
The success of such undertakings in England is
based on a very different state of affairs. There
lnsurances are not obtained as here. through
the solicitations of an agent; they are usually
consequent on legal advice, and are frequently
connected with marriage settlements. The
social circumstances of applicants IN England
are more thoroughly known than is possible
here, and these must form an element in esti
mating such risks Here every applicant
comes under the wing of an agent, and is
known only by his representation; should
man come to a company unsolicited, the very
rarity of the case might cause him to be
looked on with suspicion. Whether or not
these social differences account for the success
of the English and the failure of our com
panies in taking impaired risks, it is at least
certain that our most prudent and successful
insurance mapagers find their profit in care
fully avoiding this description of business
but perhaps it would be different If it were
carried on by bureau at Washington.