Year: 1872

III every insurance company OF large ex-
tent many policies are held by persons of
considerable estate, who have no difficulty in
paying the premiums, and who would by no
means leave their families destitute if their
claim should not be paid when due. Such
policies Doubtless contribute to the strength
OF the company, and it is no reason for refus-
ing to insure man that he is rich enough TO
do without it. A rich man may insure his
house, why not his life? And especially if bv
so doing he strengthens an institution which
provides an Indispensable blessing for the
man who has no estate but his life?


But if there were only rich men in the
world life insurance companies would be
little better than snperfuous, waste of
labor. Their true function is to provide a
substitute for wealth, an estate which poor
man can bequeath. They exist particularly
for rub-and-go people, whose year-ends scarce
ly meet. Such people always compose very
large, if not the largest part insured. This is
so true that, notoriously, many of them rub
and don't 90. Insurance is a great blessing
to them while they can keep it up, and they
might keep it up longer if it did not cost

too much.


Now, with distinct view of these two
sorts of people who take life insurance poll
cies, we are prepared to define, understand,
and appreciate, the powerfully and expensive
ly advertised "Tontine Plan.' 1t is a con-
trivance to facilitate the going of the people
who can go without rubbing, at the expense
of the rab-and-go people. Its sole and only
function is to make the richer part of the
company richer by making the poorer part
poorer. 1t does not introduce into the
mechanism single additional drop of lubri-
eating oil, but it takes from the wheels that
have too little whatever they have, and ap-
plies it to those that have no lack 1t cum
ningly introduces into the body of the policy
bet on the persistence of certain annual
payments, say for ten, fifteen, or twenty
years, should the party live so long. This
little gambling arrangement, where the stake
in the company's hands is the legal reserve
and the surplus, is, of course, safe thing for
it. 1t holds considerable sum of money for
which nobody can call it to account short of
at least ten years. This is a uery comfortable
thing for the company when it happens to be
as much as iG can do to show the legal re-
serve under high pressure of present ex-
penses. But it is rich, operates in a palace
that Midas might envy, and will no doubt
have the stakes ready to fork over at the end
of decade. How about the parties to the
little game, by which is meant the Tontine
feature as distinct from the insurance?


The losers are, first, those who have died
in the meantime, and, second, those who
have lapsed or forfeited their policies. The
winners are those who have survived and
kept their policies in force-supposng the
company pays them what the losers have
lost, supposition that calls for a certain
amount of faith. The losers who have died,
have lost by the Tontine bet only such sur
plus Us had accrued up to the time of their
death. This part Of the loss, much the
smallest, probably, for in ten years there are
commonly many lapses to one death, and
surplus is always small compared with re-
serve, falls equally on rich and poor. So that
game one loves to call it a little game-is
fair enough, as game, in regard to this part
of it. The losers who have lapsed, have lost
both surplus and reserve, as they existed at
the date of lapse. This is what, without ex-
actly knowing the amount, they bet on their
ability to meet ten, fifteeI or twenty annual
payments. Here the bulk of the loss is sure
to fall on those least able to bear it, and the
winning; go to those who least need them.
As game of long purses against short ones,
it can hardly be said to be fair. At any rate,
the average effect must be exactly the reverse
ofthe avowed object of the institution. 1t is
as if Temperance Society should endeavOr
to promote its cause by establishing liquor
saloon under its lecture room, or a church
should support its minister by lottery.


Insurance is necessarily, to certain ex-
tent game of chance. Its peculiar benefit
| arises out of this fact. But the hazard
should be kept at a minimum. The little ap-
| pended game, called the ''TOntine Plan," is
wholly extraneOus, superfluous and unnec-
essary. 1t could not possibly flourish il the
fools were all dead, or nearly ALL For that
matter, we know that highly gullible, but not
unworthy people so abound, that lotteries
and many other sorts of gambling could
flourish, if only legislatures would give sufli-
cient corporate facilities. Why they allow
| their creatures who are authorized to deal in
| life insurance to entrap the unwary by these
Tontine Plans, might perhaps become known
to the public if the advertisements of them
were not to profitable to admit of free dis
cussion in the daily press.


ELIZUR WRIGHT.
T,,lxy