Year: 1875

A LIE INSURANCE TEMPLE


We had hoped that the day OF extravagant
methods of procuring life insurance was past.
So far as the companies are concerned which
figure most largely in the reports of State
Commissioners, this is an evident fact. But
that the tendency is not wholly rooted out
may be judged from an announcement in Ihe
Southern Plantation. 1t is there stated that
the State Grange of Alabama has "consumma-
"ted" the following arrangement with the
Changers Life Insurance Company, whose
chief offices are at Mobile the Com
pany has made n contract by which the Order
of Patrons in Alabama is to receive certain
proportion Of all the premiums obtained on
lives of members of the Order in the State,
and on the lives of others who may be In
duced TO take insurance with the same pro-
yiso. The Order of Patrons is to devote the
money thus obtained to "the erection OF a
"splendid temple for its use" presumably in
some part of Alabama. Tho proposed struc-
ture is further portrayed as "a magnificent
temple" ga monument to the Order" and
"a strong element of its cohesion and stabil-
city,"


Let us see what this means The premiums
of life insurance, with certain rate OF inter-
est to be earned upon them, make up the
amounts which must be paid when the death
claims come in. 1t is not a business in which
any speculative profits can be made, or any
payments evaded when the policies fall due
If the business of investing the funds is well
managed, more than the estimated rate OF in
terest will be secured, and there will be some
surplus to pay dividends. If the minimum
rate of interest is not obtained the funds will not
be sufficient to pay the policies since the deaths
will take place with mathematical regularity
and without regard to the state of the Golfers
of the company. Plainly, if the premiums are
invested where they draw no interest the
funds will not meet the death claims. If in
vested in something which cannot be sold for
what it cost, the deficiency will be still greater
If given away to some other people than
the policy -holders-some people who are to
use it for their own purposes and gloriication
in building a temple-the prospects of the
widow and the orphan will be slender indeed.


1t is no reply to this to say that many of
the greater life insurance companies have in
vested their funds in large and elegant build
ings. In most OF these instances this form OF
investment pays handsome interest in rental,
and in all it helps to relieve the company from
one of its heaviest expenses, its own rent of
Offices Even this may, however, plunge
concern into difficulties. The company which
has so narrowly escaped extinction in the Con-
pecticut courts owed its chief trouble to in
vesting nearly 100000 in a building of
admitted architectural beauty" whose value,
calculated by its rental. was perhaps less than
q third of the cost. Had tho money been sunk
in a temple in Alabama, the company would
never have come out of the lawsuit alive.
Nor is it a complete answer to say that only
portion of the premium receipts of the Mobile
company are to be thus invested. 1t must be
q considerable portion to pay for the mag
"nifcent' and splendid" structure out OF the
premiums which company perhaps two years
old can gather in.


The probable explanation is this: the per-
centage which the company has agreed to pay
to the Order for this temple that will not be-
long to the policy holders is regarded as
commission paid for the new policies of which
the Order will supply the applicants. There
have been young companies at the North that
paid away enough to build very pretty temples
in commissions to canvassers. But the history
of those companies is very brief; their early
years were their only ones. Very bright were
those early years, as we are assured is the case
with the Mobile concern, since death claims
are few for many months after the applicants
have been pronounced good risks by the doc
tor. The troubles come long after but in bat
talons. Since that era of extravaganza our
companies have grown wiser. Economy is
marked feature of their annual budgets. More
over, they are much helped in their virtuous
resolutions by rigorous system of State in
spection. Alabama, we believe, has no insur-
ance department Should it ever possess one,
its mathematical talent will be much exercised
over the problem how temple for the
Changers and their life insurances are to be
paid for out Of the same money.