Year: 1875

PIERCE ATTACK ON THE PRESENT SYSTEM OF


LIFE MISUNDERSTANDING FACTS FOR THE


PUBLIC.


The Convention OF Insurance Commissioners and
superintendent continued in session yesterday at NO.
l56 Broadway Mr.. Chapman presiding and Mr. Pills
bury secretary. Mr. Joel NJ Spencer, Of Rhode
Island, and Mr.. A. Magill of Minnesota. were intro
duced The Chairman announced the Committee on
Taxation, Deposits and Fees Messrs Forster Spencer
McGl, Welsh and Nyc.


The business OF the day tho delivery OF ad-
dresses. the first OF which given by Mr. Finch, or
Indiana in support OF his resolution that there is
necessity for legislation for the protection ofIe policy
holders Mr. Finch's address fell upon tho Convention
like a bombsnell, but he was heard courteously
throughout The following were the salient points,


PIScu's EXPOSITION


The contract for life is the most one-sded
known in business. II Is framed by the best skill
side engage to give immunity to the and
hold the other with the utmost strictness The agents
and solicitors on side, who present and urge the
contract have the opportunity TO know all the parts or
the contract and skilled IN presenting everything
pausiby the other Is stranger 10 IL In every part and
can know nothing Of IL more than what the agent or
solicitor says In the continuance of the contract the
convenience discretion and judgment OF one side only
Is consulted II the other does not like anything DONE
from any cause Is unable continue paying as he
began, he quit but in quitting he is liable 10 lose
everything he has paid and at best is only able To Sc
cure what Is granted in the sole, uncontrolled and



tured by the death of the on whose life II was
issued the beneficiary has been met by more unjust
more inequtable, more discreditable and more unex
pected defences than be found in any or all other
classes of contracts How exactly these statements
are may be judged by an examination OF the policy the
practices and the deences of life insurance companies
OF the policy II Is sufficient TO say that II framed by
the best skill that the companies engage The con
slant effort Is TO restrict the policy holder in every pos
sible way and leave every possible escape to the
Iany The policy binds the holder with chain of
riveted steel; binds the company as with rope OF





draughtsman OF the policy Is perfect though but few
companies can complain that they are under the excep
ton. The policy has usually said that II would be void
and all payments on II forfeited If the one on
whose life 1t is issued shall die by his own hand
The have begun to hold that this only applies
when the policy holder dies voluntarily by his
hand in the possession of his mental faculties To meet
this the draughtsman added that II he die by his own
hand insane, the policy should be void and all
payments under it forfeited to the company The naked
injustice Of this considering the fact that mental dis
order Is liable to fall upon any one and that the attempt
TO commit suicide is the usual symptom Of mental
disorder, excited such unavorabe criticism that the
draughtsmen of several Companies added this clause
"ln case he shall die by his hand while insane the
amount to be paid by the company this policy shall
be the amount of the premiums actually paid thereon
with interest" Here the draughtsman has clumsily
failed He has far failed to discourage suicide that
TO large number of the policy OF the company
he has offered premium on suicide Life
companies must do business on the theory
that from a majority of policy holders they will
receive than they return 1t would therefore, be


greater advantage to the holder Of the policy in very
many instances If the premium and interest were
turned than IT the sum named in the policy was paid
II men will commit suicide To give the to their
families due by the ordinary terms of the policy at
death, will they not much more be led to commit
suicide If they thus to their families larger
than If death came to them naturally This bung
ling clause thus thwarts the purpose of it But in all
other regards tho policy is perfect piece OF work.
sdering simply the interests of the company. 1t is
onesded and unfair In what 1t oms 10 say as in It's
usual expression. 1t is silent for instance, as to
the payment Of dividends or If dividends are men
toned it is simple mention; the method of calculating
or the manner of paying is never expressed The sur
plus Is only mentioned to say that it is confscated
should the policy any account be forfeited There
is the element OF uncertainty in the policy in this and
many other respects which cannot be found in a
tract where the interests OF each party TO 1t have been
equally consulted OF the practices of the companies
in their dealings with their pocy.hol ers much might
be said to show the absolute uDfarness OF the contract
1t will be sufficient to note few points in which the
companies have every advantage of the policy holder
To begin with, the contract is only made when pre-
sented and urged by the companies through agents and
solicitors II is never applied for The applicant is SO
called on the principle that the speaker ot.a debera
tive assembly is SO called The one never known
TO apply and the other in his position is forbidden by
law 10 speak The company selects its agents, and the
agents select the solicitors At best they
sharp, determined and not rscrupulous men,
ready to make almost any representation con-
cernng the policy or rival company Al worst-and
the great majority so appearthey are men who have
failed in one many other occupations The occupa
ton of canyassng agent or solicitor Is unpleasant
that OF ordinary feeling will go into il IL any
thing else can be done Having failed in all other un
dertakngs, and having now no choice he enters this
service for the that he do nothing else This
requires neither character experience adaptation.
II is easy to make such an engagement as to be-
come book canvasser. He is thus driven into the
field by hard necessity, having perhaps neither
special fitness special willingness, any spe-
cial requirement to recommend him. II is enough TO
know that he must do this or nothing and must do
this business he will be paid nothing
He is paid according to his success There is
to expect from man so situated high degree Of care
funess in explaining the contract he Is Offering II Is
rather to be expected he will present in whatever
light will induce the other 10 accept IT, IL is unfair TO
man to send such an agent or solicitor to him He has
tn m m huNpt IN 0QRtn n nfniF Ia
has not only every nducemen but he has every facil
ity for unfair dealing The one he approaches knows
nothing cannot know anything, OF tho contract
offered for II is simply described 1t is exhb
tied. He may every art he has, may give his prac
tced imagination untrammeled play and the other can
not tell II he be speaking truth or ctOn-he can only
rely on what is said But the hardest feature
OF the bargaining is that there Is nowhere any
responsibility for what the solicitor says. He Is not
himself personally responsible the general agent who
appoints him is not responsible and the company would
at the suggestion that 1t responsible for what
its tnerang solicitors may say concerning its policies
Hard this seems there is perhaps yet harder tea
ture Every syllable that the one who signs appli-
cation says concerning HIMSELF whether 1t be material
or immaterai affecting hln us risk iavoraoy or un-
favorably, must be strictly the policy will be
void. Though the questions put to him are strange
and call for information he has not always in mind,
though the voube sgent and the plant examiner treat
the application as bare formay still If II vary line
rom tne Tact the policy and all payments made are
forfeited And so the solicitor having restraint
upon him, either morally or legally; hav-
ing no responsibility, either to the appli-





driven by his necessities into this the only business
open TO him. and being paid only he Is successful in
securing applications TO be signed, goes into the field of
life insurance. having nothing to lose and living to
gain. or the practice of the companies IN every
cecding step little better showing be made The
company Is all the time supreme-ar above questioning
Or examination. 1t sits in shadow Of mystery and
speaks in technical phrases and the policy will
yanly attempt to penetrate the mystery comprehend
the abstruse speech. When the policy Is forfeited or
lapses from any cause the holder receives what
the company gracously will give. Such concession
IL is always treated by the company concessonis
not subject to supervision. The forbdding mantle OF
mystery covers the calculation of surrender value
the amount to be given padup policy, as 1t covers
every act OF the company in its paatial retreat The
terms OF the policy so strict that II the holder
should not be satisfied he has appeal and redress
An act OF grace must not be dictated questioned
He cannot ask court to give him his rights, for he
has no other rights under the policy. Here again Is
an uncertainty that has no analogy In any contract
drawn in the mutual interest Of the parties to It, When
the holder Of the policy dies the beneficiary required
not so much TO prove the death as to prove 1t IN par
Ocular way The forms must be followed, the proof
rejected O hpr