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Show i SOME LIFE INSURANCE HINTS. The fact that the life insurance companies of the countrv handle considerably in excess of Five i Hundred Millions of dollars annually, which arc trust funds, of the most sacred character, of their millions of policy holders, and that these are to be found in large numbers in every important community, com-munity, renders the subject here treated of unusual interest to a numerous class of readers. The cost of protection, which is the primary if not absolutely the only legitimate purpose for which life insurance companies exist and operate, varies as much as $8 or $10 per thousand in the different standard institutions. Tho man, therefore, there-fore, who is carrying a .$3,000 policy, which is probably not far from the average may be paying pay-ing proximately $.30 per year in excess of a reasonable reason-able sum for his protection ; a sum which, if invested in-vested so as to earn four or five per cent per annum, an-num, would aggregate a sum fully equivalent to fifty per cent of the sum insured during the average aver-age life of a policy. In view of these facts, it is of the utmost importance im-portance that applicants for life insurance exercise a wise degree of care and discrimination in the selection of the company whose contract they buy. The "old line'' or legal reserve plan of life insurance in-surance 'is, demonstrably, the only one that is, inherently, in-herently, reliable. The cost of a policy in the most economical and judiciously conducted companies com-panies is burdensome to the average insurer and is, in fact, in excess of what it should be. This is due, in a measure, to the fact that the more conscicntous managers must "meet the competition" of the more recklessly managed concerns; that is to say, in order to secure the necessary amount of "new business" busi-ness" for the achievement of the best results, they rind themselveo forced to pay "tempting" commissions commis-sions to agents, spend large sums for advertising, etc. Now, it follows that if $10 per thousand the net cost of protection at the age of 40 in the most economically managed of the "standard" companies com-panies is excessive, $18 per thousand for the same thing is akin to highway-robbery. Yet the latter is, proximately, the net cost of an insurance contract in one of the largest concerns in the country, and in none of the companies which represent repre-sent over One Hundred Million dollars of assets except one is such cost less than $1d per thousand I per year. The waste due to extravagance of management man-agement and the injudicious selection of risks amounts to uo less than Twenty Millions of dollars t annually, every cent of which is paid by the un-suspect un-suspect ing pol icy -holders. But it would be worse than vain to publish these facts, unless there be also given some indication indica-tion as to how to distinguish between the economically economi-cally and judiciously managed and the recklessly conducted companies. To do this with n satisfactory satisfac-tory degree of thoroughness and accuracy would require more space than we feel warranted in giving giv-ing in one issue of this paper; in fact, to attempt to elucidate the subject in detail in a journal of this character could hardly be deemed desirable. We. must therefore be content with a few general observations. As already intimated, it. is safe and wise to "turn down" the "giants." In their frantic efforts to become, each, the "biggest show on earth," the men charged with the management of these institutions insti-tutions seemingly "lost their heads'' and resorted to recklessly extravagant methods in bidding for patronage. Commissions were increased fifty per cent or more; large and unreasonable "bonuses" were paid; enormous sums were expended tor advertising ad-vertising and as Lawson puts it for subsidizing a venal press; risks were accepted that should have born declined, and thus were millions and millions mil-lions of dollars of their trust funds recklessly squandered. In order to render available for such purposes large sums of money, these concerns persuaded their "clients" to accept "deferred dividend" con tracts. Under theso contracts sums aggregating approximately Two Hundred and Fifty Millions of dollars, that should now by all rules of fairness and justice be in the possession of an army of policy bidders is being "juggled" by these managers to suit their own whims, and it is probably safe to state that to this abuse is chiefly due the numerous minor abuses that have proven so costly to the insuring in-suring public of the country. Above all then, "fight shy" of all deferred dividend divi-dend contracts, and all companies that make it a practice of issuing only or chiefly such contracts. It was our intention to indicate somewhat more clearly, by figures, some of the essential bearing upon this topic, but having already exceeded a reasonable limit. as to space upon the subject, wc must defer this feature to some future period. |
