IMAGE EVALUATION TEST TARGET (MT-3) 'iP.. y. 1.0 Ifi- IK I.I 1.25 •^ l» 112.2 H: li£ 12.0 1.4 m 1.6 v^ <^ /^ (9 :^v^. op, m Photographic Sciences Corporation ^\^ s ^^ V s». k ^\ 4^ '^\> ^ '^^ 23 WEST MAIN STREET WEBSTER, NY. 14580 (716) 872-4503 nioiioy accurniilationH, — the other appealing to popular prejudice a^aitist the (hm>,'erH of powerful monopoly. The battle is not ytover, — it still rnires all aloiiirtlip line. ^^any are confused hy the loud waruinus of ea-li --not to entrust the protection of their dependent oiu's to the other ; while otliers Mindly adhere to the system for which, without ade(pjato information, they may have eoneeived a preferenee, T\w mission (»f this little work is to lay before the pid>- lic of this Dominion enough of the principles and history of T-ife Insurance to enable each dispassionate reader to decide intellifjently upon the merits of the contendinj; systems, and whether there i^; not a new and vet better system of |>rotec- tion to the widow and orphan of the future than has hereto- fore been oflered to the Canadian public. It shows t'uit lu'ither of the rival systems is sole i)ro- prietor of all the merits, and neither, of all the defects ; that the popular uprising^ acjainst that system which so Ioiil,' held undisputed sway was not without reason ; that the fierce assaults a.i^^ainst which Assessment Insurance has ever hail to battle, arc not without cause. The Safkty Ft'xd System is the result of an iutellij^'ont effort to combine the merits, and avoid the defects, (»f both its older competitors ; and while, in these j>ages, the defects of each are fearlessly exposed and their merits cheerfully aeknowledtjcd, our one object is to define and vindicate our own principles. This little book may result in a saving of anununition to those who have been wont to waste it in attacking princi[)les (3) . . **'a-'t \ i I (■■ !. - — ^^^-Pi'ta r ! ^ ) !■ r-^ < i j^^ V H !•: I i\iitiiral Svst<'iii of Lite liisiiraiico. I. WHAT IS i,iFK i.\sri;.\N(K? " // M till ,^tnii(liiii/ loi/it/or, slioidilii' fn tihtniliU'r, nj hoitu of mnnbi ni> II, lo ihl'nul I'ur/i ntlur's Ikhiu'h frmn the ciimiti/ that n/iootH uii the nhf (ind in t/tf dark. It in tin- rtitliuttiini nf /luUfriiil'/, , V'ithoih liir di'Afnirtiim of imh'pendfncr mid iitdiridindili/. It ' i.s a I'l.iiiihf iriflioiit cnni, irliir.h cnrirfw.-i (hr ijirer ^lud dutif not ! /( 'Hilintv the lYcen'ir.'' — Kw/AH VVkk.iit. TnK |)ussil)h' widow and orpliati is the .ictive prlniiplj' in liiff I'i>iirani'('. If Wi- could circiimsciilic oiir (U-votioii to tlii' lia|i|'ii;t''>> and wcll-lx-iiij; of di'in'iidfiit ones liv tliu uncorcaiii U'lmii' of our own lift*, we would have no lu-cd for iiiwuranci'. I'.nt this we caunot do. I^ove of ofl'sjiiinj^ — a [•art i>f iiur very iiaturi- - leaclus licyotid the limits of our own lift- to tlir i-ud of theirs. It deiuauds that we should exert our powers, while w».' live, iu providiu<; for thi-ir sup- port niid education, and ur;,'es the provident father to [u-oteet tlu'iu a:,^'iinst 1usincss prudiMice, and exjject no other return lor its cost than immunity from personal loss; they are uijj;ed to the other by turther eonsitlcrations of parental and coujunal taillifulness, and the ri'turu which it Oilers for its cost is tiie couscioii.suess of bavin;,' dischari;;ed a duty towards depenilent ones, by thus "substitutini^ the cer- tainty of a siiULf patrimony for the uncertainty of the con- tinuance of tlu'ii- own life." (6) S I sa^-*- *sf»>:5-^ » Tlt> Sntnntl SijHtnn it/ LiJ*: Innuratu'f. ~1 i \n prohrtiitn Ut tlir ixfnh', uilti iIm' n)nMrt|iM>iit rclcilNi* fruiii iiiixiity in tin* imiIv ntiini Mllrrctl liy tire or initriiic in- suraiMc lor its cmhJ, h,, prdtn'tinn t<» tln' JnmHij, with its roiisi'- *|ti<-iit MUiHluflioii iimI I'l-lf.'iHc fniiii anxious nirr, in the 'iiily n'tiirii lilV' in>*iirim(f kHitm fur itn rust. Ami what oiIht ri'tni'ii l|o|(i hy llin iiVMI ^kill UIkI I'lirrKli'^t ; aiHJ, tlyiii;;, tlitir iii>(>itM iiiu Nii|mlic(| liy Iiim own prixlfiit Ion- tlioiiulit ill |ilariiu^ the seal uf tli*- life iiisiiniiicc r.tinpaiiy ii|ioM his !;iil;ir physician will ilia^noNv tlii' purticnlar ( aso of IiIh Kovcral patients, an<|y tu rach ; hut lh«' nnpiiic will ('ninpiiiitDl a iiostniin fintii a iiiimiIht of n>- ini'ilial ayfiits, ainl a«-siin> the piihlic that his is a spi-rilic for "cvcrv (lisnise incith-nt to hiunanity." How lik" his iiiMJdi. oils aiiv<>rtis«>iii(Mit is the followin;/ I'amiliar iiiiLrj;«'t from or- dinary life insurance' appeals; " NO matter what may he the ohjrct of your solicitude -he assured -whether yon are thinkini; uf the maintenance of ^('iieral hfalth ( ?i ur ot' com- furl and ciuupetence in voiir old a<_'e !''•, or <»l' tlh' IlltlTOsts of »!('(' and cliildrcii \>Im>ii >oii iiiii} \w no iiiorr, or of a provision lor your hoy when he reaches mature jij^e i?). or of the happy marriage and wechliii^ portion of your little dauy;liter (.'i one day to he, you hope, a hliishiiiK hridc, now a tiny, prattling fairy of two or three vears — never mind the siiliject matter-he assured." I.il'e insurance is, indeed, the only -me sjtecilic fur ** NollelliMlo lor tlu' liit<'n»Mvli(>ii you iiiay he no inonS'' l)iit lliis is its only l'nn<'(ioii. It is the I'uiictiou. luit nf ///V iiisi(rr tlwit fx«'«-*t<« ill rf^iiliir MiivinuH iiiKtitiitioiis, ttr in tli«' IniMincH.. r:i|iiiiil <*t'ili«* ii4Hiirr«l. INSIKK Koli l'IC()Ti:( TInN, .\NI» I-I:AVK li.\NKIN(* To IMK M.VNKM. II. M YSTKUY. Tlir iiuMT workiiiirs i»f tlio lifV- insiiraiu-r oIVh-c Iiiivc luii^' Imm'H iii>-Iiiitii(lri| ill nivMh'ry. Tlif iigfiit lia^ t>\vv Inch flti- <|iii>n( ill lii<« ii|)|M>:iis Mil l)(>liiili' (if tlH> p'MNiltlf willow ami r;illu'rU'H> rliil.I, hy wliirli In- liiH Htiirtd In attiiin llii- nnlilrst aiii| iiKot iiiisclli<4|i iiiipiiUi- lit' till* liuniaii lniMHt : Im- lia<< |>aiiit»Ml fill- a%'!irit'«' fVrvifl |ti(tiire» of wiallh Mnwini; rrniii till- iii-iiiraiicr |inliry ill the r<>ini of ciKlowiiu'iifM, 'runliiu' pro- tits, ami "Miiiiai ilividt'tids : Imt In* has tx-vrr liail tlu- tciiicri'v to iitvailc llic iiiiii'i' citiirt of this "rhiirch of tiiiancial salva lion," aiiii ( xpitsf t<» viij>;ar yazi' its hidilcii iiiysifrit's. With- in the veil is hfiiiK drawn annually over sHi(i.(Mi(»,0OU tVoin tlu' famines of llic nohjrsl iiu>n of Anicrica, while only alioiit *li.">.0( »<),()»(( I In annually rt'tiirned to tht'ir widows and or- ihati cliildreii. l-'or over u rcntiiry. why om- hnndretl dol- ar-i slionid Im- collfctiMl from the insnred lor <'\»'ry twcnly- livc dollai's returned to thu widow, wuh ritdtloin asked and never answered. Meanwhile life insurance " has ^rown upon the country like a proilijirions drt-ani, lia\ iii^; palaces, powers, and potentates of its own, with incomes that little kinys mi^ht envy." I'kUt the present aye is mori- impiisitive and practical in its spirit. I )oiriiia and prescription have losi their power over the pu!>lic mind. Kven life insurance is called upon to answer How'.' an NiMiriuiiM ; mill, ti»t u rcMiilt, roitiKTiiiivu or iinmv Mifiit iiiHiiruni'i' iitiM lou olU'ii Itroiiuht only iii to il'« irii-tiil'* :iii<)' ol' ilicMi- |iaucK to ri'iiiovc tlu* Vfil iiiul nIiow what iii'i* tiic |»riii<'it>l«'M •>!' ttu* NiM'i> ol lilr iiiniiniiu'v, tllltl llii •lt'M'|*i|i|||i lil« )>r |iax| fX|K*l irlH'f ; to rilll llir ll'IM- iVoiii llic talx' , >iii*i •!) iMoii»||'ulc that tht- h\^tt'iii \vi- aWviM-ati* i>crit|tii>M the triif inhhlh' uroiinti tictwcfii thi* twofXtrciiu'Mot' cxiiciiMivi' iiiHiii-aii) t' hv h'M'l |)t'<-rniiiiii<« ati*! ih) ittii'«'tiain or iiiilflinilf iiiMiiiilK'f l»y ym.-./ innrhtn u-m •.'nuiiti ; ihatiti'ili- hoiliih ivi'iy tUriu'Ht of |M'r|M'tiiity ami iVfry piiiHiph- of iM|iiity atitl I'foiioMiy whiili the sri« im- of lilf iiiHiiraiiLi' rt- cogni/i's, or thi' expfru-iu'i' ol" tlu' past han (U'Vi'lop**!. *• Wi' <"m r)ow look h:uk upon tlu' pa>*t i'X|»«'rictuo of ihoxc phill!» anil lakr (linii a» a lia^is upon \\hi<'h to lou u< I oilier, uikI po>Mihly more i'ar-ri'tu hiii^ nittho ill that syslt-ni oiiyht sur«'ly to In- «'ou>*i(l»'n'(l an j;ct a cU-ar i-onccptioii «>!' lliis tliiiKUt, ami to ilo Ko, wu shall suppose earh of 1,(»U0 nun, '2\ years of a^e, to deposit Si in hank, undir an a^-iveinent that the .•^LCdd thu> deposiH'(l shall he paid to the family of the lirsl to (lie. A death oceiiis; tlu' ."^l.UUO is paid to the widow ; a hei.'ilhy man, tin- same aj^e as deeeaxed, take> his plaee, and the iK pttsits are lepealeil. At the i-nd of the yeaj' they have liad fi paid SS, and the einhl widows have received the !iroteitiS was TtiK cost oy ixst KANtE that year. Should anv wish now to discontinue, he has had full Ar«^A»«. - •*«»'-; 1 Kilt, S of thu lirst ; a and <>•), tiie liic hat full Jl. r i The L» nl- t^mnmiti Annlifiil, -^^g ViiliH*, ill till- |tr(iii*ctiiiii I'lirniolifil, for iIm' iiiniiry paid till' hank llll^ no iiidiii-v tin df|Mi»ii wiili uliiih in u'lvc him » utirn-iidcr vtiliif lUv wlioU* aiii)*unt !» imw ininisiiriiiK lu till' llr.ilit'H ot' the ri^dlt lifi'iMVi'd wivrt who huvi- h< iii dfprivrd of ihf hii|>|iort the Millmv; haiihatid« luiil allordi'd. l.«>l (hi* di'iMwitN \m- rohtiiiiM-d, iiiidiT ihf ^aiiif <>ondili«»n4, ViMir alU'i' yt'ar. NVh«ii nuh >>\ thf I,. :U1 Vfars ol »iiv, iht'V will have nine dtathx, lllal^ill^' tin* cn.vr «iF iNHt'KANci': ij*'.) liitit y«>ar; wluii tl viarM of a^'ts ten will die, inakin^i ^1<| tin- «n»r ok in-h iian* i; liiat v«ar. 'rhii-, ilii» t ti«*r ol iNMiUANt K any viar is din* lly d» ptiidtnt uii (lit* tiuiiihir iif di'iilliH iliat year l«> tin* I,(MI0 living;; and as i||i> rtiUt ol' aiinnal iiioriality i*< iKcixtarily ^rcaliT iim a^'c ad- vniH'c'**, HO llu' ro>r «»K iS.-ii:AN« K. imist iu'r«'«.«*aiily inrrfaHf with till' a^*' ot' the iii'^iiri'd, "Apart from th«- cxprnMt* of condiK tin^' ilic hiiHin«Hs, the «()>*T »»K iNHi'KlN«i :i»I,ufl,H in oiif ifnir nj' /onn juimttis inmriinj that ^um nt t/uit y ixaiiiinini; the fllect of aduiitliii;, new entrants to our theoretical Hociety. We hav*' seen that the N ATI KM, <(»ST o|' IN.SIUANc i; at uge "^4 is .^S.OU; at ;i^e :{♦), .^'.(.(lU; and at a^e 11, .tiKHHt. Admit now, with our original ^roiip. aj^'eij 41, an fptal iinmher a^ed 1*4. The lieaths will he ](» • 8" 18 in the 2,'.• the cost to old and yoiin^ alike. 'I'he former have ;:ained and the latter lost 5*1 each as a result of the union. Had the (»ri;;inal j;roup attained the ajre of tiO years when the union occiirreil, the result woiiM he much niaynitied, as the natmal cost at that age is .':2<». 'I'here then would he 20 I 8 '6\ deaths, making the cost to each ."i!?17. The old would uain s'.t hy the union, while the fur their philanllirupy. younj; would pay >:'J \ •■>j '»-?« } The Nntunil Sijifffm of Lijr hmiiratiri'. ~t At tliiw st!ij;(' It'l a tliini fri'onp .-it tlio ayo of 41 cntcM". Payment licint^ frradiiated l)v the nattual cost at a^c of entry, tlioy must pay l!") per c-ciit. more than tlicir associates nil of whom entiTed iit aire 21. The deaths in the ,'{,000 will l»o 20 ■ H ■ 10 14. rnakinjj; S44,Ooo, the total of death losses ff>r tfie year. The eost to each of the old meinhors would he $13.')4 — a train of !^12.U) upon their natural cist; to each of the youn^j memhers 8i;i.o4 — a loss to them of s").r)4 ; to eaeli of tile middh-'-uueil SKI.'.l'i — a loss to them of S().!>2. All this eonfiisio;^ and ine((uity would he avoided hy each payintr itUo a eoninion MoR'i t auy I'uiid the natural cost of his presnit ajre, without reference to his ajre at entry. Thus; 1,0(10 aj,'i(l (•)(», pay >^JC..OO each 5JC.,0(H» 1.000 " 41, " 10.(l(t " .., 1(I,(MM) 1,01)0 " '2i, " S,(l() " S.dOO T')tal payments to Mortuary I'uiid total dfath losses :i:lJ,0(Mi And this is the plan really i>ractieed. How this c;in he done, and the fad of his payinnt for nuuiy years, which the cotupany hanks to the credit of the policy and uses in after years to help the $\\) pay the then increased cost if the risk. These over- paynu'iits of the earlier years c'.,.stitute the reserve, whose only function is to pay for insurance to he furnished in the distant future. The general impression of this huui is that it is vi'alth, a guarantee of stability, security to the {)olicy-holder that the contracts made hy the company will l)e fullilled ; that, for exam})le, should an e])idemic occur, this Reserve Fund woulil be poured into the Mortuary I'^uid, and thus save from loss the d(M»endents of the insured who die. Ent the fact is, the Reserve Fund is not wealth l)ut a debt, not stre/ujth but iceakness, and cannot, under any circumstances, be used to discharge claims upon the Mortuary Fund. The moment •iB*^! I I 7 \^ tt?^'* 1 4 1i \- The Level- Premium Annhjzed. II I it is toiii'lu'd for such a purpose the (^»in|);uiy is bank- rupt, though it lias millions of res»M-vos besidis. Itcservos luivecruslit'il scores of cornpiniies, an ^« f y The Nulural iSyntan of Lij'c Insurainr, 1 *' No part of tlie reserve can be used lo {)ay a (li'atli claim on any policy save the one to wliicli it belongs, — any more than a bank (jf diiposit can use the funds of one (hpositor to make g«jod its losses to any other." — ii'. />. Williuiu.i, Con- suUiiKj Adaari/. Loading. Kx|H'iise is inseparably attachcrl tu the ellicient manage- ment ot life insurance under any form whatever, ami a sum for this purpose - ealletl LOADlNt; —is athied to the two ele- ments of the level-picmium ali'eady descrilx'd Though this is the primary source- fioiu wliich expense is paid, the whole SUlil'lAS, yet to be exjtlained, is available lor ih;ii purpo>e, and [iractically the managers are unrestricted in the amount so tonsumcd. The following analysis, by Klizur Wright, of a level-pre- mium at seven diflerent peri(Hl> iii the life of a policy, will clearly illustrate its three-fold nature, the function of each of the elements composing it, ^ud their relation to ea(;h other: Wholk Ln-i: I'oMCY. A A(;e 47. Total Prciniuni, T WENT Y-FlKST Y EAR. Cost of Insurance, Deposit for Reserve, Loading, Total Premiuui, . *241.()0 . )$U1.00 SD.IO GO.GO t2H.OO .W100.J)0 7'J..W GO.GO Then AciE 52. 8241.00 Siiaa.7o 57.70 60.(30 S241.00 ••'*»- \ \ 1 ? \ S 1 '4 L. rfW.*^ claiin lUOK' ilur lit I. ( 'on- u Slim ;li lliis wliole mount L'l-prc- y, will it" OJlcIl other: M — tiO.OO $241. (JO '.):;. iO bO.llU -i^LMl.OO SO 1.00 SU.IO GU.GO S2tl.00 IOO.90 tJO.CO $241.00 l.J'^.70 57.70 S241.00 W'J 1 i> t /hid - ( 'p f\>h'rj/ — Surrrudrr Vithte. 1.1 'I'UlWTY-SlXlir Ykau. Tiik.v A('rvo, Loar Total I'romiuin, «14H.lO ;f2.:;o tiil.CiO , S241.00 TniUTV-FiRST Yr-.AR. Thi-.n Ae(iiict from [{cservr, .)!jilMO.(SO .20 Paifl by this yeiirs rrcmiiim, I-niidinV, ■••."• ?l.sn.40 CO.!')!) Total rreniium ?241.0O Total ainoiinf in Kpsitvp at end of tills yi-ur, int. 4 percent , 194,05?. 70 If will be obscrvefl frmn the nhove: 1st. Thiit the ;issiiii'(l li:is ])iii(l each year !?(•(».>)() for ex- penses ; 2n(l. That h*.- has paid each year the natural wst of his insnrane«\ whieh has increased from SS.'i.oO the first year to §!180.r)0 the thirly-lirst year; .Srd. That diirini,' these years lie has made deposits in rp:sp:rve. in sums frotn $97.10 downward, to the anioimt, at 4 %■ int.. of .S4.Ho2.70 ; 4th. That the deposits to kkskkvi"; cease the thirty-first year, and it conlril)Utes 20 cents to help the premium pay that year's cost of in.*;uraxck and exi'KNSk. Each year thereafter, as the cost of insurance continues to increase, the contributions from reserve will gradually he- come greater. ) IV. Paid TIP- POLICY — SURRENDER VALUE. Should the assured under the policy whose [iremiums are analyzed in the preceding chapter fail to ]>ay his thirty-second premium, he would recei\'e no consider.ition whatever for his ])aynients to onM of inxiirctncp. and cxpi'nxc ; and, ('/' tlieij have I | bpen rcnsmnahle in amount, he has receiccd thrir fnll valve in the j jrrotectioii f>irni>^lti'(l. As well miLrlit he claim that the price i of a barrel of llour which his family has cimsumed and en- • joyed is money lost, as that a reasonalile [)rice fr)r that protec- ' i tion which sweetened his sleej:> for thirty-one years, and has I been a perpetual shield to his household a!4,'>')"2.70 into the hank of the eompany to help pay tur protrction not yi't reC('lv thetitne npproaeiies lor its delivery he tinds he has no need for the commodity, Imt jj;reiit need for its price. He oMcrs to sur- nmdcr his policy, hut linds that it makes no just provision for smy eontinjrcncy hut death, and that he is un«lfr a hond of over four thousand (lolla»"s to ^io on with his payments. Even under the Massachusetts Xon-Forfeiture Law, of his reserve he nuist forfeit $!).'5().r)4 outright, and wtjuld receive but !*!|{,7'J"J.](» worth of /i/Z/i/v insurance, under the condition that at his death all the unpaid premiums (J^'J H jier year), with it', interest, will he deducted froiii his claim. If he insists upon receiving cash instead of future insur- ance, he is entirely ;it the mercy of the company. Actuaiy Willey tells ns that, " In decii2.74^; l)ut he can now withilraw that hank deposit, no matter how jrreat Ins exifrencit-s mav be, oidv hv forfeit- ing from >^l,1Ga.l7 to $2,:J2«.3r) to" his hankers. How precious this privilege of depositing in the life-insurance bank ! Amzi Dodd, speaking of the i>ractice of the largest com- pany in the world, says : "They seldou) pay, I am informed, more than 50, and often less than 50, per cent, of the Reserve; and wlien it is considered how large, within the past few years of pecuniary distress, has l)een the nund)er of ))urchased policies, and jioli- cies forfeited entirely, it is apparent that large sums of money have been accumulated from these sources. . . . To illus- trate : take the case of my own policy, Issued in 1854; its j^^ i ;^ r I •*»*-: <**-*' \\ coin- 50, and en it is •uniary (1 ])()li- nioney iUus- 54; its i J'} cent" 1 ^ cost ■ v-(inu ul lias H)im e posit, ortVil- IIow 1 I n ranee 1 ; Oriijin of Snrplu)* — JUi'itle.nilH. 10 \ HVMVAiW. vuliie is now $4,lino. 1 have |iai*I the company fiillv for all the itisiiraneu I have had, and I'or all the ex- peiiscs intident to n\y )iolirv. If I say tu tlif cnnipMiiy, I have no lucd of the insurance, and <,'reat need of ilu- nioiu-y, and will ;;ive np my future insurance and take hack the monev 1 have advanced for it, the company will idiar^'e me for such a ehan^'e from oO t(. CHI per cent., i.e., from .>!li,lliO to S'J.oliO." "" Of flic same Company Mli/ur Wriirht says : "The lapses have lucn id)out as numerous us the remainin*; nu'inliers, and ^ ; have forfeited (from ilicir reserve), or heen char;,'ed on sur- | ' render, sums wliich ay^'reyalc hilterly nearly a miij.ion l»oi,- LAlts A \ i;aI{."" No wonder that the same authority, who has ilevoted the eneruies of a lonif lift; to a reform of the { ' abuses of life insurance, exclaims almcjst in despair: \ "The lite insurance policy, nv i:kas()N of thk AccfMt- LATloN I'Niu.li IT, is a trap which st-rews tip ti^diter and tiiihter, till liheration comes oidv l)v death, or expiration of the term. When there is as perfect an iniderstiindinu he- j i iweeii the Company and the p(dicy-holder as hetweeli the savin;;s hunk and the di'jtositor. and there is no forfeiture out , ol" projiortion to the dama;^e of non-fnifdment of c()ntract, i j life insurance will ri'cover its popularity, and take thorns out j of the pillows of younj,' fathers, who now shun it as they I would a pestilence." j [ It is to hrinj^f altoiit this perfect understanding between the Dominion Sakkiy Fund I>iri; Aksociation and its patrons that these pages are written. V. ORIiUN OF SfTKPLUS — D1VIDP:XDS. No branch of our subjeet is so much descanted tipon by life- agents, and so little understood by the i»ublic, as DIVIDENDS. As one listens to the fervid ehxpience of the sol.citor, as he rings the varied changes upon the richness of this source of wealth to the assured, he fancies the Company possesses a se- cret iniknown to otiier iinancial institutions, by w'dch wealth can be created from nought. Dut not so — even ilie mystery of the dividend can be ex|»lained. and the world move on. If t!ie data upon which the level premium is calculated be exactly realized in practice, there would l)e no surplus, and no dividends; but as a fortification against fate and lickle r ^]>. 10 '••mtJ''^ I The Natural Si/^tnn of f.lj'c In^nranrr.. fditiMH', (Imsc (l;it:i ;ir<' alt<»K<'tlur favornhlo i(» llic ('<»iii|Mm\, and in praclu'c a surplus Is the invnrinlile rt'siilt. 1st. The taMc.H of mortality Ity wiiicli tlio cost of INHUR- ANTK is (U'ti'irniiH'd in cal-'ulMtiiiLc fhc incniiurn, indicate a dratli-rafc cnnsidcrahly liii;licT than is rcali/.i'd in practice — especially in these latitudes. The tahular costs of' the insur- anees riiinished l>y the lar^M'sl (':inadian company for the vear 1SS;{-1 .iLTLfrri^'ated i^ la7,(IM."(, while th;- actual cost w.i.'; hut S'J.'i;!.>«i l.t(>. leaviiu; a prnjit from this source alon«> of :Ti20;!,2:!0.'»l. As the actual cost was hut oH^ jter cent, of the assumed, :i pMlicy-lioIder payinLr ^slNO.Of) jis his cost oi- l\- SUHANCi; piiid an uver-chaif^e ol" .'i>s;! '.IS. " l>ividcuds lo policy-Iiolilers sire praetieally a misnomer. They iirre is a second source i^^ iM-ffit to the comp.'uiy. The averaj^e rat*' earned in Canada in ISH.'J was over 0^ percent. — leaving; 2 or -J per cent. oT the entire .'{FCSkkn r. as profit. The larj^'esl Canadian companv, havin^^ a lilv'^ElfVl-; of •^4.(J4t),'Jo7.47, thus deriv.MJ a profit of" !^02,.SO.').15. Tliis is just so nnicli more |)ai additional '1\ per cent, he, and this amounts to Si 11.84. which should he ad(lcd to his premium ]»aynient to give his actual premium for thai year. .Srd. The richest source of profit is the forfeiture of the whole or a part of the kt^khve, by discontinuan* e, as briefly referred to alreadv. The really te»nporary nature of what are entered into as wh a sad commentary on the fickleness of human fortunes and the instal ility of humati jinrposes. Notwithsl.andimx the fa<'t that, " whether a ntan will be able to pay in some future year is often as much a matter of nncer- taintv as whetlu'r he will die in that year." m( n. ovtM- confi- tleul of tiieir powers to battle with fortune, audi of their own stability of purpose, are ])ersuaded into taking upon themselves oblii^ations r(M(uiring a lif(>-time to fulfil, and to place themselves under bosuls wdiieli increase as ihe years gather, that they will never change their puri)o«e. The ag- %A -f*f*- * f i f } / '": INHUH- licate a rtici' — i> iiisiir- for t Ik- OS t wat; iluno of . (if the 1 OF IN- ' snonicr. i s whirh 1 1 ; ler than 1 thorciH ' •avinK 2 (■ lar^'csl ' .47. thuK 1 Icrs than ri'd pays . interest i Ih t'..\ per (l(liti<>i\al ^ should he jircjuinm 1 iro of tlie as briefly m1 into as i fickleness purposes. 11 l.e al.le ' ; of nncer- j vor confi- 1 of their in<^r upon 1 lil, ami to I th(> vears 5^ Thb a- *-7 i >, f •"♦^•t Or\f)>n of Surplus — [>ividendn. 1 ;(r('jrate of these hoiids for persistent payment (reserv»'i hi-id hy tile companies in .Vinerica lo-day is JHO millionH of (h)l- lurM — II sntn eipial to the eomhinol value of the t-ntin- co(t(»n crop of the world, and the ••ilk crop of India, China, and Japan. The usual result is the forfeiture (»f the hond. I'rof. Van Arnrinj;e, of Colunihia Colle^'f, a must searchin;: critic nf the siilijcct, declares; " ( )f t-very i will he jjiven up for a sli-rht compeiisaiioii. and 7o will l»e ahsolutely thrown away hy the hohU-rs," This opinion is very strikinj^ly conlirtned hy the consoll- dati'd experience uf thirty .\merican life oflices, sittce piih- li»hcd. ( )f l,(fj7,")'J!> entrants to those rompanies np to 1S71, Ill,(i!»-J luul ilisconliniied, and 44. -Is") had di»'d, at that date, makini,' ctver iiin»- «lisconlinuances to each death. .James T. Iliirns, cdiisidting actuary, says: ''The ex|)e- rieuee of the hest life coriipanies on this continent shows that not more than lOoiit of every 1<>() insurers ki>ep their poli- cies in forcv' for 20 years." N'atiian W'illey, an :u>tuary of eminence, says : "It is ji lamentahle fact that tin- policies, as a class, taken duririj; the last few years, jirc short-lived ; in the hest companies only seven or eij;ht years is estimated the average. And this is mostly owinj: to the dissatisl'action of the pulilic and th«' mis- representations which agents have made ahoiit future divi- dends, surrendei- vahus. liherality of the company, etc. Lite insurance in this rountrv has not hei-n oirrihiiic, hnt it h;is heen f>iiilli/ done, and a thorou<;h reform is imperatively de- manded. Hut the fault is not wholly on the part ofthea^'uts; the officers of many companies are e<|ually tn Idaiiu- fur fur- nishin;^' the means and the opportunity of misrepresentation. They sup|>|y aj^ents with printed dociuuents t^ivinj; wonderi'ul hypothetical statements, whieh may he realized utider certain conditions; tifkv cai'sI': (jfikat kxp?:(TATIons and 01 vp: rNriNiTi;siMAi. KKsui/r.<<. . . . I!ui more information now prevails in rej^ard to this suhject. .Men are insurin<,' now for insurance, and not for the prcuuist-d dividends; they are i)uyinir insiiiance as a protection to their families against want, and not as an investment." Eli/.ur Wrii^dit says : " Jii/ tlir f/ain.-f of for/cifiirc, companies of virtual swindlers, under the name of liife Insurance Com- panies, wasfirii/ (t full thu'd af ihi: J'nnd,-i eidnislnl to llteir aire, have existed throu<,di an entire generation and made a show of solvency and rcspectaliility. In reality, for ingenious \ rogues, a mutual life insuran of |)liiiitKr, with :i priticiplu (if iiiiiiinrtiility in it." 'I'lif (itinpanifs iiniy " inh Pt-tcr to pay I'aiil " hy iiiiikiiiv; »livi(U'ii<| conscictict' wotiM ratlii'i- wiii tiioiicy at tlic I'aro Itaiik or kcix* talilf, wImtc the ricli man is as liaMt; to li»«! Its llic p<»<»r, than l»y this ln'iiin^' nu porsisti'iu'*', whfti; a (•(•llsidiTahlc part ni to keep lip their payiiu'iitH, and tliu losses only to those who, hy the niist'nrtnne of poverty, are compelled to forlVit ihusf i.avini,'^ whieh minht have resened their homes iVoin llu- hherili'> hummer, or saved their lamilie- iVoin hnii<,er. ILiW loudly piust experience se l»y its extreiiu' «'X pens*', and hy whit-h they will (.KT WHAT THKY PAY Foil Willi, !•: TIIKY PAY— placili;^ little in the hands of lIu' company tit forfeit ! All the prolits (»l)taiiied from the tiiree sonrce^ nami'd are added to the total ineoine from L(>ai)!N(}; the expenses are paid with lavish hand ; and what then remains is sriU'LlH, a part of which is relnrnetl to tlu' policy-lxtlders as divid icU. A few more words of expert testimony and we shall leave this snhjc'ct. The Insiirance romni'ssioner o/tlie St.-it.- <.f Majiie. says: "This ri'payment to the p(dicy-hoider has no claim to any snoh coi^nomcn as '' dividend," and is all a tU'li.sion. It is merely a return to the owner of a |>arl «)f the exci-ss, pre- viously taken i>ut of his own pocket when he purchased his policy, or had it renew»nl. And it is tuly a part, inasmuch as a deduction has l)eeii made from the excess for the ex- I..., jienses of its own collection. It is, in fact, as if (iie should sell for a i(ullnr an article of y//V// o»7//.s valui', and ;;ive hack afterward /»'e/t^/-/ack (tiie-half the surplus afterward, have ai eqiuil claim to credit for payin<; u rich dividend on their investment." A cari'ful student of the wli^V r •♦•/*-» \SK \ ri. r 4.J •*)»^-i h the A'» .«•••/•»•« Xt'cfMatyf — Krpn-t 7\atimony. ■^1 nearly the prt-niiiiiii Mpproiifhcs tlic iihiuiiiiiiii licit is con- hiMtcnt with satrty, the hetttr liutli tnr the eoriiiiuiueh tiiid 'or the a«Mure1 11 IK PKOIMJ-:? EXPERT TESTIMONY. The UKsf.uvK is eertaiiilv iiec'eKKarv if we would pav a level-preiniiim. The e<»st ol' iusnraiiee iiiereasioj: with every vear oi' life is no tietion, hut the result ot° a tixed law ol nature which it is madness to attempt, l»y any iu^«-nions device, fo (Vuslrale. Assessment insurance has j^euerally iirnored this has.d principle in the science, and the re^ultint; conliision has ln-en illustiatcd hy our theoretical society, and more t'orcihly in practice hy the disaster which has al- ready overtaken many honest, hut Juis^fiiided, attempts to fly in the lace of natui'.''s ilecree. Ihit, as the reserve is only a cloak heneath whii-h the advancing cost of insurance is col- lected, why not pay that advancing cost, without the cloak ? Amzi I)odd tells us: — "if thk i'oi,i(,'V contract, instkad <)I" cAi,!.iN(i yon THE 8AMK I'UKMII M KACIl YKAK, SlIOl'l.I) < ALI, F()U TIIK fiRADUAI.I.V INCin:.iSlN(i NATIKAL I'KKM I CM, Til KKK \V(»l'M» S'K No :.'KKI) or RK.sKI{\'i:s l)R ACClMLLA'rK!) ITNDS. TnK COMl'ANY ANM» ITf< MKMHKRS WOULD HO BUSINESS ON THE RULE OF 'PAY AS YOU GO.' TllE I'OI.ICY-IIOLDKR WOULD (iET YEARLY THE EQUIVAI-ENT OF HIS MONEY I'Ain." When a man insures his life, the commodity he hnys is protection, to liis dependent ones. Let him apply the prin- ciple's jipon which it is liought and sold on the level-prenjium plan, to the huyin^ and selling of some other commodity, and see how reasoiialde it looks. He is ."32 years of age, and has just insured his life for !?1 0,000, under a level-premium (»f .*2il per year. l\' the sup- |)osition is i)((t loo violent, we shall suppose the agent ex[»lained lO him in «letail the nature of his contract. He is captivated hy the mathematical nicety and subtle refinement of the sys- 1 tern, and longs for u level-grocery bill. *^fi^r 8 Hi) { I w Thi ytUiirul Syttlcm 11/ Life Iiuiuninee, *1 He liaMtciiN to WiH ur<»c(>r, 11 man who contliit-ih liin ItiHiiifMH ill |)riii('«-ly Nlylc, iiiiii of t'c|iiil«'il m-;ill)i wliiili. Iiuwcmt, <'oii»iH(h ill Ilix Iruiliu the k>>!. T |N>o|ih>'M inoiicy it) tniHi, iht- tft'iiiK ot whirh not he il ih'tinoi, h't't him iiiiiKliT of the Mlnatioti. lie ih (li'liyiiitil with the |»roH|icct of <,.'ittiii;,' yt-t inori- IiiihI fiiixlN to hamlU', and i-moiii jiu'rs hi» rn^toniii' in hi* liiiicv, Tlu-y i.j;n'«- that thf LKVKi.-tiiuM kuy 1111,1, »hall hf>^j41 \>vr yt'iir whilr ihf ciiHtoiiici' liv»>; ^'tid.iKi |»rr iiiiiiiini ■^hall )»• th<' dt'uU't's pltilil ; llir ll»t (•()>( ot' tin- ^jtM-fl'ifs |o In- deli \ fl'id thu tirHf. year Hhall he i^Mli. .'{(); and thhall lie .'^!)7.I0. A ma\iimiiii stah' of cost of sii|tji|iis to Im' dt'livcri'd cacli yrar i>< auirrd Upon, aMowint^' for a u>'ii in roiisumption :ts ihi* custoiiM'r's family iiicri-aHi's in aye and tinndu'iH, ho that tin* maximum ihi- thirly-lirst yoar shall In- ."MMt.tlo. j-liii'li ye returned t(j him as a IHVIDIIM). No provision i>. made for the ii'tuin of thai (iver-payinent, exci'pt in ;,'io< ci ics, and when he no lon;;»'r needs that comnMHliiy he, too, will hnd himsi'lf in a " trap." 'I'o complete the analogy, the grocer must aj^'ree to ri-turn the amoimt in tvust at the death of his customer, provith'd it lias not alre;idy htcn forfeited by some technical hreach of contract. The analogy is not a torced one, for there is no m(»re rea- son for a man going into a "trap" to escape an increasing inffurance bill than to escape an increasing tjnxrri/ hill. \Vh:it other commodity in the wlude category of human wants would a sane man think of paying lor frc^m lifteen to tliirty years in advance, even if he knew its cost to him would surely increase? Then why so j»ay tor protection? Why attempt what has resulted only in disappointment and loss to ninety of every hundrecl who liavi; attempted il in the past? r.VV AH YUU UO, AND (Ji;r WHAT VoU I'AV 1 ()l{, Tav for protiction to vour dependent one i the cost of each vear l)V Itself, and get thai iirotertioii. Add the r»'.st'c/''.< thus saved to your own caj)ital, or invest them where they will not he bevoiid vour own control. ) -nt^j 4 '!> s&^- Crt 'r •S /m tht Rutrvf SeeeMiiryt — H/prrt TfMimony. til 15 •'Tlio fiM't that miili'r tln» onliniiry form of policy tlic lonm'r niu' HtiivH in llic cotnpiitn I)oi)'t ronfi'M iniiltility to traiixiut yuiir own IniMinoM to ikIviimiiiuc, Ity crtMitirii; a tni^t yon ltavi> no |M)wi>r to rrvokc |)on't aihnit wi'aknf«*«* Ity tin- off.rt'|n'iitiMl confoxMlun that th«' ri-xi'i'vi' wduM nut li«> navfil it' not ilr|HHiti>ii with th*' <-i>ni- panv, anti ln'yon»l your r«>rMi>«tf>n<'(* of lU'iMMit than thf tircail of fort'i'itin^' ihat whith yon catntot rrarli, rvm in thf «lir»'>*l rxlri'niily. FUo, \\\\s ilu siivin:_'>^ hankn tlouri^h, withuiit tin- aid of a canvasser? It han airrady lurn kith that lh»' fxlstrnt't' of th«' n^<»rvo, and the |>fnalty of t'orfcitinK it, in \vhoh> or in part, hy dis- rontitnianci', Auv^ nni nernn* pfrsi'-li-ncr, and as Kli/nr Wright rt'asiinahly Hn^m-Nts: - onlinarv form of policy the , IV tin* tnor«' it ('ohIh hini to )iv\. out, rnusi have something; to do in an-onntin;; lor tht> ini- nn-n-^r outward ^frainltlt'." From ihi' >arni' hiyh anlhority wo learn that "three Ihinn* are es>m|»any's loHinj? hy In own death (cnerally fails, partialiv or whollv, for want of the second and third essen- tials." ' The only necessity for the existence of the reserve nr>,'ed Ity the most al)le defenders of the system, is that it furnishes this third issential; or, in other words, the forfeitures recom- pense the ci)iiipany for diminished vitality as u result of the retirement »f healthy lives. r.ef(tre rlisciissliijf this suliject, it is diii' to our readers, in a few words, to make them Itetter actpiainted with the autlioritv whose opinions we so freely (|uote. I''Ji7.in' Wriirht has made more of a study of this particu- lar hr.-mch of the sidiject than any other liviii}^ man. When Insuiance Commissioner of .Massachusetts, he [)laced on the 1,; statute books of that ('ommonwealth the first legislative en- ) '7^ ) Thf iVd/iiru/ Synhm of Liff huturaim . •^1 < iictiiU'iU for protcfiiii}; tlir tit(litM of ttit> ri'iiriiii; iHilii'V* lioldir ill liix riM»rv«» — llu' Ntinl'url'i'itmr I.iiw of |M»'l|, iilr«-ai|y iiiriitiuiH'«l. For liiiiliy yntrM In* iiKit'tl«'*l I**!' >i uutn* roiiipli-lt' rct'orni; ttiiil, tlmn^h opiKMtMl l»y rili itii* ritrccH at the <'i>iiiiiiiii)(l of It wi-iilltiy Mlit;iiii-liy mIiomi' iiiiiii>4t rrvi'iiiirM hv iiHMiiili'il, li)> ii:m livi'tl tn mm> (Iii> (■aiHc triiiiii|)ii uml lii>« viuWHcryHtiili/.«Ml ill thf Mhhmiu IhhiKn luwut' IHHI. "'riiiit law iw thf iiriKiiici of tliiit inaMtcr iiiiiid wliidi Iiim (|mii(> sit itiiirli, williMiit r)'war rnn> htiMiiicHN of lit'<> iimiiraiM't' wlicrc it dcMcrvt'M to Hlaiid — tin- un-atrst liuiiianitarian iiiMtitiitinii of itii> ttnv iVfi'tl from till' ^'raHjiin^ avarice wiiicli liaM no loiii; ami hiicrcHNl'nlly ('oiilro||«Ml it, and is now ho inaiiiicMtlv I'lidati^crin^ il^ Nal't'ty. I rt'lVr to inv Iriend, the lion. Kli/.iir Wright, tlie vetiran Actlliiry ol' iiiv tiiiK'H." — /<;. />. \\'illiiim», ('iint*ullin(j Aflmirif. Ainoti);; his opinion^ which ultimately Mwiiyed the mimi of the MiisHacliiiscKs legislature, we liiid : '* Tlu' ahsoliilt' nt'ct'HKiiy for u certain forfi'iliin' or mirren- der ('har^e to si-cnri' the persistence of the paymeiitH, jiiHtities neither an excessive charge, nor tin- iiiei|nity of making; it too Hliiall on some p(dicies iind loo lat>>e on oilier^. "The praetict' of the I'ompanies triinscends the ri-asons for it, aixl rides roiiKh-i^hotl over the tdd l.atin law maxim, i^f mudiis in rebus (evervthinjj; Iwis its limits.) " If a company does not indulge in extnivaKain'o o( ex- penscH. the rettervf of the firnt yeav (jinn umple nerurity for per- () isst ranck IH A St KI'iClKN'r BOND TO flOltSlST, AND COM IM.KTKI.Y ANSWERS THK UKqUIRILMKNT Ol' TlIK TIIIUI) ICSSKNTIAL. " There is no reason,'' says Mr. Wright, " ji7o/ « life insur- ance aHHorialion which iti.Hure.-< without hankiiuj, xhould not he (is pennanent ax (ini/ other, and better <(erommo*v 1 /((■(■. It AN'CK KIKI.Y r 1^ Ihf Hi « I " .\>i>!*mfryf — Kxfttrt T'^lntmty. Wf nIuiII n«(ini)>ny In •«iip|)nrt llio opiiiiniiH oC tlii>« liiirli ;iiiilinrily. Sli«-|)|mr)l iloiiiaiio, the ilixtiiiuiii<«lici| rii'tiiarv nf New Y«»rk. "•hvh: "A** a |i«'rH4iii uri>WM uIiIit, tin* ri^k of ilyini;, or in otlu'r vvuriU, tilt* r |iai or iii:iiini InnuHhttl in the inlnrc, ami akk not aiwoM rKi.Y NK« JXSAIlY lo XKt rUK THi; I'Uo'l I r HmN |»I>IKH». TIics»« vast ai-(tnniilatit)n><, «)0 A>it)M:i) Moi.Ki.Y iiv nik: auiii i< iai. HYMTKM «>!•' i.KYKl.-i'itr.MM M^, have, in too many instiinccM. hccn l<>>t liv the (liHhont'siy or int-ompctency ut'thoMe charKcii willi their cn-titi|y and inve«trnenl. " Thev oiler t'earrnl temptation^ to nn^^crnpnlons and hiiidd omit, liy accident (»r neci'Hsity, to pay any ntipidaied preminm when dne, Imh rertt'iv*' or He«'n(Mnlated deposits may, l»y the nsnal terms of the policy contract, he fort'cilcd or conliscateil, and the policy Indder ix ntirely at the mercy of the company." Mr. Iloinans, who has spent a whole life "within tlio veil," knows where<)f hi- speaks. These *' ^reat trnst finnln conlidcd to the Manajicrs,' nnlike the trust finids of otlu-r liankin;; insiitiiiions, far exceed any security otlired for llu'ir honest and failhlnl administration, even hy stock coinpa" nies, whose capital soon liecomcs hut a dn»p in the hiicket when compared with these enormous aeennndations of in- dci)lcilness. In view of this fact, and while th»' richest moneyed institutions of the age are crashin;; in ruins through the falliliility of human nature-its lialiilily to err in juili;- mcut and to hi' overcome hy yre.-it temptation - shall we point to the roiR mundrkd an'd khuity millions, not of wealth, hut of trust fumls, now controlled hy the few men who manauc American i/ife Insurance < 'ompaiiies, and cry " lU'hold a tower of stro!ij;th !" This " tower of strcn^'th "" has proved the ruin <)\' every I.evel-I'remium Life Insuraiico (!ompany that has failed. The reserve, collected ff»r the p.ay- inent of insurance to he delivered " aftkr many ykar."," is in part scpiandered or applie^r),000 in tin" Knicker- bocker Life Insurance ('om|)any, which gavi- up the ghost some time ago. Jle wrote to the Keceiver to know what his policy was worth. The following is an extract from the re- ply he received : Your claim is valued by the Receiver at \\\\\ he deducts from liis valuation — ]•'())• your indebtedness on jireniiiMU notes, ... , For your iiulebtedness on premium charges, Total detluetions, Leaving the net amount of your claim only It is on this last sum. (he dividend will be rated. likely to exceed 20 per cent., or, say $0.00''^ ! ! A writer in the International lieriew estimates that, in the " ti-ansfers " of eight com]»anies (1871-77) to the Universal, nearly twenty-six millions' worth of policies disap|)eared, and that in the I'niversal, seventy-four millions more linallv disa])peared within that period of seven years. lion. Oliver Pill.sluiry, Insurance Commissioner of New Hampshire, says :— " No substantial reason has yet been adduced, why a per- son should not pay and renew insurance on his life annually. SI 70 SO 00 491 42 491 42 SO 00 ed. It ijs not "•*-e«irt i ■S I i^i i •a &^^^ s is the Renerve Necei^mry? — Expert l^esfhtunnj. 25 S ns lie (loos oJi Ills MisiiinM*' |tr<>|if'r(y. Tilfo hisiirntict'. von- (liK'tt'd sdiiM'W liat :irt<'r tlu' iiiiuiiu'r nf aiitiii:il lite iiisuruiKH', would Inrtroiy do siway with the necessity of the lieiivy "re- serve" af'CiirMuiiitioils, f///Tr((/j/ //(»' s/zA/cr/ iif ilrrp rdiict'rn iniuniii thttiKtlitfiil b:(,'(l whicii may easilv he e(»mpri'hen(lf(l. and thronjxli which the masses may ohtain reliahle life insurance, f.'ipiridlhi ihiriiiff tlif Idlh'tr prriod, at lens o.^if, AVI) HAVK .IL'ST WHAT TIIKY I'AV VuK.'' Hon. Stephen II. Khodcs, TnHur.inn' ('iiinmlsHioiter of Afdsn- (irhnHetts, says : — "It is lif'comini; more apparent every day that a radical ehai-ue in the phnisot' lite insurance is demanded .... What the puhlic recpure and will have is a form of insurajjce adapted to their necessities, i^evel-premiums, extenlications loying some modihcation of the jiresent plans, v/ilch k/kiU be free (or largely ho) from the henry hiirden of accuinula- tions for future benetit, which is cast on the shoidders of the present. rf^^-rt r Sl 26 \' Tfie Nntnrnl Syi^tcm of Life Tnnnrance. "TIhtc arc fluinsnnds wlio Wiint lif*; insurance, nnd wlio desiri' liiiit in rase of liit'ir iniliintly dcatlis, its protcrtinj; mantle ni:iy bo east around those dependent upon tlietn; and tfio.su who have not an ahundaiit share of wealth, need some cheaper form, covering liiliy llie necessities of the present, without ainj it.nnvce.HMii'i/ (icciiinulation for fiitiiri', cnntiu- geneit'H thiit innij never occur." We tni^ht (pinte the opinions of Fjicius McAdain, James V. iSiirns, and «ither actuaries of eniinence, who unite their testiiuony tiiat a system of life insurance re(piirinj:: ))ayinent.s to a niortuiiry fninl in advance (if deaths, hy each mendter in proportion to ids own risk of dyiui;, and rcfiuiriutf a reason- ahle honil for persistent payments, is not only sound, hut thoro\i<,ddy adapted to the real wants of the people. Consideriuff that the reserve finid is not wealth hut a y hankruptiu}^ the company when its mortuary fund nii>^ht he in a healthy condition ; that hut few wlu) contrihute to tiiat fund ever derive any henelit fron> it; and that thousands who most need protection are iniahle to buy it when heavv deiiosits are also demanded : the elliirls of the Dominion Sakktv Fund Lii'i': Associatiox to fur- nish that protection without the eiunhrous, dan;^erous hiirden of heavy reserve, should enlist t';» sym[)athies of all friends of the people and enenues of arrogant monop oIm-v a won- derlidly constant law in his dealin^^s with the iikiiii/. 'I'hns, amongst .■)(;;{,()()() persons a<;(M| .'itl he is (timnxt eertnin to mark "),lili7 as his uwn y which events dependioLC on constant thoiiuh nidmittcd in a year; tlie ratio of the numhcr of ac(piiltals to the niiml)er of trials ; of pati'iits admitted to puidic hospitals; of railroad acci- denis, t^e., all atti'st tin; constancy nj the re,-, in the reiiirience of events of the same kind, enaliles ns to determine the average residt of a sciies of coming events, of whose cause we may he ignorant, witli as much precisidii as if we had accurate and detailed knowledge of the causes which determine tlu'ir occnrrcui-e. It is the api>licatir)n of this law that has raised life-insurance to the dignity of a science. As soon as the rcipiisiti' data irom past experience co\dd l>e arranged, life-insurance was no longer to grovel in the darkness of mere cijujecture, hut could pre- ealculate the cost of its risks at the several ages with inathe- niatical precision. For this ])urpose the results of a series of observations on ()2,o.'»7 lives, assured by seventeen liritish offices, were arranged into the Ac1iiarir.< Table of Mnr'iliin in 184:>. which table is still very generally in use. The American l^xperi- ence Table was arnitiged by Mr. Sheppard llomaus from the mortality experience ot' tlu' Mutual Life of New York, with other available statistics: ;ui(l, though it indicates a lower rate of mortality than the former table, it is better adaitted to American business, and has long been the standard in New Y(U'k and several other States. In 1874 a committee of \ i "-'SH-;^ •V^r^^rt ) i Pn'itriplfM iif the Sajtii/ Fund Syxtem. 29 ^ Aiiu'rican Actiiarifs I'umiiu'nct'tl arraiitMH)^' tl.rdata t'linii'^liiMl l»y thirty American oflicfs, aixl l\\v ri'.siilt of tluir lal»<»rs lias recently l»eeii |iiilili>lic(|. it is the ciiii-'iiiidiiiri «x|K'rieMcc (tf tliiisc (itli(i> Iroiii the is^iu' ol tlicir lirst pnii y up to 1874, and cojiipriHcs on l.d^T.o'Ji* assiin-d lives — tile iiidst extensive werloH of ohservationH yet taladaled. It is (Voiii tlie data fiirnislied liy llie Mortality Tidilc, and the .issiiiiiptinii tlia( iiMtiire will cdiitimie to oli^y her own laws, that tin' Company calculates tlu' iiirolci' nj runt nj iimnr- diici' irlilrh (hnfli >r>'ll u-rlfr l\ and !ty which the price is lixed in advance. IT (ickle fortune shoidd turn her i)ack upon the('ompauy, if the natural law upon which it ri'lies shoidd prove inconstant, and (K'ath-Iosses pour in upon the ('ompany in excess ot' ils calculations, the compara- tively small capital stock could not htui^ avert dis;i-.ler. To make money, tJie Company must collect mon- than the co.-h the i' erj.'y, popularity, and re(;litude i'n'd l»y tens of milliotis.'' I'he ahsenee of a i.ir<;e reserve does not render '.ipital more necessary for the security of the insurance eontract; for, if a Company have millions of rcsei-ves. and a policy-holder die whose contributions to that fund aj^;,M'e^ate but lifty dol- lars, not a dollar of the reserve in excess of the tilty he him- self had contributed can bo taken to ]»ay the claim occasioned by his death. The safety of the system, — the security to the assured, lies not in the cai>ital stock or in the I'esci've, l»ut in the ciiu^taney of naiui-e's laws, and the mMlluMuatical accuracy with whieli their future operation may l>e deicrinined from past expt-- rience, whicli enable the (,'omjiany lo pi\'-c;dculate its de;ith- losses and create a mortuary fund sudicient for their pay- ment. > S .K) \ i The }i(Uural System of Life Inaurancc. -if Sernntt !*riiirinli\ — Tlio assured trrst cntor in ^kkI lu'.ilth ;iti(l willi(»iil tlic inlit-ritJinci' of special disease. The ellect ol iiiedical ^"Ii'clion ii|ifh(ill he in l)ri>j)i)rti>)h til the rish of dritth at Kiifh tiijca. This principle has lieen shown to he a ritdhtm'; it isemhodied in l'!li/,ur Wri'^hl's " eauentidlH tit the peniKiuencc and proxperitif of a cmnpany ; " ami, thouj,di the ilefenders of assessment insurances have denied its soundness, and mystilii'd themselves and, too often, the pid)lic, hy x'a.LTue discussions upon the etlects (»f the "eominjj and yoiuLj" ol' memhers, (heir " average a^e," and tin>ir "ex- pectation ol" Hie," yet it /V thi Joundntinn stone of ercnj sonnd si/ittcin, — (he one element of perpetuity which has saved level- premium insurance fnxu indiscriminate ruin. Tile following TAIU-K OV RATIOS ^ J^Jxpresscs the relative ris/:s of death in one i/ear, at the several (Kjex, as determinedbij the Actuaries" Table of Mortality : Age. ' Ratio. I .4*76. i Ratio. A;/e. Ratio. \\,Age. \ Ratio. Age. ! Ratio 21 22 23 24 25 2(5 27 28 70 71 72 73 74 75 76 78 29 30 31 32 33 34 35 36 1 80 1 82 i 84 1 86 1 88 1 90 i 92 , 94 ; 37 38 39 40 •11 42 43 44 96 98 .100 102 101 10(5 108 113 45 46 47 48 49 50 51 52 118 ' 53 1 124 04 i:50 00 137 r)(5 145 : 57 154 58 163 1 50 173 fiO 196 209 223 238 254 272 2't2 '>-^*^4^' i ■? .1 A* hr \ — ^a^:t^ health I'Xpf- (-hidcs ill, Itiil nstitu- xaini- t-nt (>r 1 liillsl s own 1 |»!iy- kUt is (' MUM siiri'd. to the 1 !i;;i'.s I'liiul. he la Ic h;is i^'lil's aixl, en in I 1, the •minx " ex- (uniil lovi'l- eirnd nmii). IIK) 'im 254 '272 2>.t2 S l*rinciplc6 oj the Safety Jt'und Syatem, 31 § } I ' Lt't it lie cU'arly nndcrstnnd tlmt thr altovr lahlc, (tC itstlf, ] I givt's no intimation of tlu* (tfiMtlnti: risk of flt-ath at iiny imv i' (a siilijiM't yi't to lie i-xatiiilicil l, Itilt mily tlir nidtirr rinks wlit-n on*t n\i>' is coinpart'il with aiiothi-r. To ilhistratc : it (h>fH not iniiiiiati' thtt risk of , is us 70 is to .S(i ; and whtii roniparrd with the risk at a^c ;>'.•, is as 7<> to 100. To i-xpn-ss it dilliTtiitly : if of an (•i|iial nninht'r at liu- three a^'es, 70 die at au:e 'Jl, hO woidd he expected to die at a;;e 'J'.», and 100 at a^je 'i{). In ohedienee to tiie (h'niaiid of oni third prineiph', wiien, an, shonhl pay .*1.00. Assessment socit'ties, whose rates are uniform lor all a;;es, or ^'raded only hy the a^e at entry, iynnre these proportiuns; and, in their attempt to ^ave insuranee "at eost," they ehar^'e the yonnu niort' tltun ihe roxt of their risk, hecanse the nhl puij /(W limn iliv rnst of t/nirn. In the earlier years of tlie life of the foeiety, wluii this ineipiity is hut sli;;hlly felt, the yonn^ are rec(»n(ile(l to tln' injustice liv the di-liisive hope that when they have faithfully home their >elf-im|)oso(l hurdeii, paid the death-claims of their older associates, and have themselves lii'come ((Id — ynuiiix uieii of pliilani hropic sp'rit will he found to it^nore the fact that the hui'dcn of lU-pendent old ai;e has increased, and uohly come forward to hear their hurdens as they did the hurdens of the old who preceded them. l*rof. Seth ('. (handler, of Harvard Coile^'e < )l)servatory, evidiutly has studied Life In>uiauce as well as astronomy, for he forcihiy states this whole ari,Miment in two short sen- tences: ''There does not seem to he room for any diversity of intelli;^ent opinion that in any association whose current i death claims are to he met solely from current assessments, ' the anioimt of contrihnti(»ns from memhers of various ages .should he piDporflfnKil to t/te (tctnal ris/: of dcnf/i. Any plan of i ojieratioii in which this is not accomplished, not only violates the plainest principles of equity, hut caiUHd loiij;; suhsist ; as ! in practice, the over-assessed memhers in a society thus organ- ized will Ix'fore long discovir the injustice, and retire, and i new ones will refuso to enter." I , As the delusion we would dispel is a common and a dangerous one, we shall give one more indepeni|iiity and aiuti] )titls;inciit r(M|iiirc the vnU' n( :txM>s>lify iinifonn rati> withoiil ri'Hpect to ani'." Fniiiili I'lliiriplr.-- i \ ) TIh' paytucniH to the Mortuary l''und shoidd Ix' made in advann-, or licfoi'c ihr claiins arJM; for w'liirh ihi'y provide, i "j i Thcii ainoinit should he dctijr- niiiK'd hy the avrram' rtcpumiu ut- of pa>t fXpt'iii-nix'. (.'{) Any surplus ari^'in;; from a iiinp«>rary rate of niortality for tin- M'vcral a^'rs hclow that avnatri' shoidd rcinaiu in liind lo pr-ovidc for a fulun- t-xcfssivo mortality to ri'ston- tlu' avcraj;*'. This principle involves three essentials to perinaneiice and prospeiity. whi( h, hi-ini^ i!U»'r-depentlent, ran he l»est ex;!iiiiu(d lom'tlier. They have always lieeu observed in tlu' main hy level-ptciniiiui Insuranee, hut are always ignored hy assessment plans. Tlu* hilii-r ii-^nally attempt to do husi- ness with an empty treasury, to furiush insiu-anee on credit, waitin;^ till death writes the invoice of its actual cost hel'ore its price is col!ec'tCHl. I'ikKm' suih a system, a Policy tjivinv: a detiMile promise to pay a di liuil'- sum at ileath is impossilih-. .\^ the payment of the *' iM'iielit ' is coutiuiicul Upon its colUction after death occurs, the ( irliticate of .Mendu-rship, which takes the place of a i'olicy, can oidy protiuse to make an asses>menl upon the liviiii; mendters and to pay the amount so cidlected. " not to e.xceed " a certain sum, to the heiieliciary of the dead. If any ret'use to pay, tlic hfnijirinrti oiii.it l<>.- furnish lljr iii.- voiir, rantint justly cluim to h'wj " insiiiimcf ill cioi.'' 'I'c jiistifv this claim tlHMlourMofiho Morii'ty miiHt alwity.s Ik- -.pen tn lU'W I'ntraiils, aii im|)os«'m liut their own th«'y must Ih' rcquirod to pay tor no risk i)iit that which tlicy asU the society to assiitui' for them, consiih-rin^j that ihcy have cotuc to stay thiouu'h a serii's of years. Otherwise they eertainly tjimot ^et tlieir " insurance ut cost." The normal cost of risk ai the s«'veral a^fcs has already hci-ii written in tin- actual practice of American insurance, an:l that i-xperieiice demonstrates that /or (he mine lu/tn ifir odiutl ntxt (hiiitiij tt fe.w jfiitrs (ij'ft'r tin' intmiiKition m much lean^ (in•/ year of insurance was ;?o, durinu the .-I' rt ;i^// year it was •'pll, wliile the average at that a^'e diuins; lifteen vears of insurance was hut $8.o0 per >>1,()(M» risk. A youiij; society of li.OOO memhers. t'ach as.sured 'or •T>5,()(M), has I'lUered upon tlie slru^^de for existence. It would win pre-i'minence over its comjieiitors, and loudly proclaims that it ^ives insurance at " actual cost." The lirst year the avera^'e cost is hut s.") per thousand of insurance, and the managers herald the tact throunhouL the land. An enlight- ened iViend points to past experience, and warns tliem that hecaiise they did not collect an average of 8S."»() — the normal i'ost- — ihev have placed a niortiiaye of SSo,(.)0() on their \ \.} future, whieli death will surelv foreclose. Thev close their i.; ►^M,„^Ji- The S'lUuml Syittnn of /.iff Innurnno'. -l II ciirH l'> the WiirniiiK, iii)«l liliiiflly hope for iin "cxcfptinnul «fX|»«rM'in«'." TIh' im'xI yrar tln'V fairly HiiNtiiiti ilu'ir rr|»iiia- tioii fur rfiiiijtntsM ami inrrca-'C tin' aiiiniiiit of flu- niortL'UiKt*. So vt'ar iifUT yrar till tin* miniinf mxt h nurhnl, ujirii tjh'Ii nayiiiu that normal coMt-no aiUlition W iiiailc to the i|«>l>t. riir s«'V('tith yvnr i«« rcaclu-d, wlirti llir k has rciicheil its liorinat cost alone have ^'ailled liy thesyMleni, per- histiii;,' niemhers lose (he at;i,'n';;!ile iA' those yaiiis, and new i^ntraiils are lairdeiied hy a liahilitv (iiev ilid not create. Thev Hri> charged !|>11 for wliat H)ionl(| vimX tln-tn hiit Is this life insurance at cost ? The dillerence between entering such a H«»ciety in after years and one in which (he, normal cost had heeii paid, and the surplus accuiuulated tor the discharge of the deot, is the dillerence ln-twci'ii Iiuyin;,' a hoiist- that is heavily morluaj^ed, and one of e'pml valm* for the sanu' price whose title in clear. A>;e 31' is selected as an illustration, hut the •-anie record shows that till' same law applies c<|Uidly to all ai;es. I- this a nuire e a^e, and all insured in llic same year. Take a society euiiiposed of alt a^es, and a uiiiulier eiiteiin^' and reliriiiK eai-h successive year, and the law will not ope rati'." This fallacy i-^ almost roparded .as an .'ixiorn l»y m.any defenders of assessnieiif insurance - it is a hasal principle in the system, and to exolode it will he to sluitter the slnietufe that is r«'areii :in a H«>t, iirul no with ili«' cuiraiii'* of (Ii< tlilnl yvnr, ami of \Uv fourth vi'nr, aiKJ of tile liltli, ami nicl, Hiii'ci-tHivr yi'iir. Hut jiHf Hhiif!)i« ii|i tlif ililliTfiil year xvtn into oii<- Morii-tv, atui iiatiin> will au'aiti ItccoiiM' t'oiit'ii^ti'il slit' rati't ir-ari'aiii{c iIm' <««>tM, ami Uvr law will Im* ili'fi>iiti><| ! 'I'Im' Miali'tiH'iif ofilir Tillacv ix itx own n-fiitatiini. It !» triH', that ir I liavi' a ar >«ft. ami ihf >'t'cori(l year Mct, tiiid tin- third, and I'oiirth roll up II dfht wlii<*h tin' lil'lh yi>iir nrt and the sixth and tin* Mi'Vrnth hi''|i to |iay, tlii' liurdcn is li^diti'iird to thoH«> who fonirariid lh»' dilif. lint liow of tin- tit'tli yrar srt, and tlu' sixth, and tin' srvi-nth ? Tlu-v an- payiiiK the nrtmil ntsl of ihi'ir inru rink, and lirsidt's, art' Iud|ii5iij tin' «>arli*'r I'litrantM pay till- drlit on their-, whih- th«>y lli< insidvi's an- rolling' np a i!iortv:aLr«' for ilnir own tiitiir<-! hy > liaritalily ptM-miltinK thiir payments, in fji't'im nf thf nfhinl lutM of their rink in the fiirlifr ijt'iir* of' thi ir i)i.'iiriin<'i\ to Ac iijijilii'il to tin' pai/nifnt of nthi'i's^ (h'htu, in.'itiiiil of I II ml i mi llnm tit itixrhnvifr ihfir oini lU'ht to tnnr- t".('t}f, which will noon imitnn . And this is "payiny as yon ^o?" TI'H t'lli't't ot iiieriiluTs ri'tirini; without haviiiK paid the normal ro-i of iln-ir ri»l< while iiiMired. has liecn swu to in- ereasf the Imrden npoti the fninrc. and l»y no process of reas- oning' can this element he shown to defeat the ext'cntioll of n.atiM'e's decree. I.est some reader may still elitiL' to this fallacy, wo shall "Hhnflle" the a^es together, and a^ain appt-al to experience. Of the whole mass of lives, of all au;es, insured in the thirty olliees whose records we ipinte, xix per ihoiiAiinil iliid ihirimj llir jirnl ijiiti' of their insurance, yoMrf their risks, and, like the hand on tin? wall of Helsha//.ar's palace, it writes the in- evit;dih' doom of their piM'pose, if not sessriient systems to tjivo lile insurance nf cost, '" oV-r leaps itself and falls on the other ) \ f ^ '7^ 'M Thi' S'lttiinil Si/ifrm (>/ Li/i" Inmrunce, 1 Mi(l<>." riic wunliii^ of till' toiilrurt iiiiiki'H it tli'luiliiM*' wlirtlur llii-y civr iiiHiinnii*' :it all ; tlifv iKiinic mir iliinl |»rin<'iplr, iiikI iliii«* roiiiprl viMiiiu "icri ami tlir Inter •■iitniiitM to pitv ii)on> iliiiii ili<> i'liNi fur tlifir »\iv Imt.'iiihc ihr nltl tiini itml tlic I'iii'liiT ftitriitits pay N'^h limn the iohI for lIn-irN; tli«>y i^iion' ili(> lirMt n'i|iiiti'tiii>nt of i»ur foiirtli iiritcipli-, ami lliiH ntinpi'l p«r»i"»tini; iiu'iiilM'r«< to fijiy iiiur«' tli'iii tin- inHt of tlu'ir rixk Ik'i:iii-«' hipHi-*! iiHinlM-r"' rfliiHc in pii\ tlic (''Ht nf th('ir«< ; tlicy i^iinn* the Ncroiiij anil thin! ropiln'riurttt of our foiirtli pritifiplr, a(i rmnpfl new nitnitilH in pay more than ilie imrrnal <'o>>t i>t tlieir rinks Ixran'^e llir rarlier eiilraiilH paid lens lliati the normal comI of theirs. Ami this is fiiriii.shiii(< life iiisiiraiiet> at coMt ! That our lourih principle U not only nountl hut enM,niinl In prriii'im'iirr mnl rtnitinii*'/! in'onfurlfif is ilemonxfratetl not hv our reasoning - hut hy ihe iuexorahle reasouiiiK ••! nature through the laws she has written in past experieneo. We have stateil that this principle has always hecn ()hserv»'<| ill Ihr imiin hy level-premium companies. Tliey invariahly collect for iIm' Murluarv l-'innl more than the normal <'ost of their risks, hul Mch a scale as shall littiiiudy maintain its dignity as an " oM puhlic functionary." The sei tahle, colunm \ expresses, in even inim- hers, the annual c(»st usually collected for 81,(^00 insur.ince, at the Several a;,'es. 'I'hesesumji invariahly produce a surplus, which, as has ah'cadv licen seen, is one of the sources of divi- ileiids. 'I No company dealinj; in life-insurance as a specidation ft I'ould lie txpectcd to char).;;e only the net cost as determined -[.f hy i)ast cApcricnce. JSuch naturally wish lo furlify tlicuisclvcs kJ . . , , , B^-«^ \ '• i 1 III Ittllll hfi'll •n "M ,1 (I 1 vi- lli. 'h I my <*x- diiiniiy |i|ily iiH (lues ilH litMlirtll, »ii- -«iiift ••xpciiNrrt Itiii \\)iv\\ iti«> u-Hiiri'tl I'lilly iiii
  • r< ilii'ir own iiti iniiiiii:iiiM'il only l>y llicir piiytiiriiiM, ilmt every
  • |lar pni«l I'nr lliat |)iiitl riMirlii' until it i«« ni'«><|i'(l to tiiiiiixtrr i<> ilie tift'i"*^ nf Hoine widow wlioNf ImihImiimI IiimI «'oiiiril»iitcd to it in liiM litV-tinn', the I'Xfiisi- for roMecliiiu more than the horiniil rout ei>ii<4«'H to exi^t. If that eiMt he tweiitv per eeiii. U^s than that iisiiallv t'olh'rted. t/if n.'Miii'fil nrriiin n ilin'ihutl nf hmihf jur nnf. in iidvnuci'. Should a eontiiiyeliry ever aiiM- that Is iilireeonh'd in the pa-< in preri^t ly the '.www position iiH if he were insured umler the old dividend system, hiH advan Iivid< iid would he rediiied for a time to meet that eoniinuetny. 'I'hat conlinnenty i* not -o lialde lo arise as under the hvstein that vear after vear uivoH tliv eompanv tlu> handliiii; of larye sums in e\eess of the normal eo>.f. with power (o withhold what it will every year, and to weaken the mortuary fund hy divertim; from it the natural surplus |o provide for delayed mortality. We must premisi' our investigation into the normal eost of iiisiiivince at the s«'V»'ral a^'es hy the remark that the hiisi- nessof this Association is eonliiuil tn I'lritish Noiih America, whose climate, soil, draimiL(e anil other conditions atli'ctin^ tl le pulijlc Ilea Ith I lave made it no te.l f. V lt> saiu hritv It IH olivioiis tliat oli-ervalioiis made in oihir <'limates. wleic the assured are exposed to less favorahle conditions, must ^ive a rate of luorlaiily hij^f her than ( a n.idian experience will vet ify. I iiforliinately, thi' volume of liu>iness done hy the thirty Ameri(*an compaiiieH in Canada, thoiiuh comparatively lar^v, is not of itself siillicient to furnish a safe yuide. The report of our <-ompaiiies to the Insurance hcpartmcnt of ( aiiada furnish us no availahle data. Those rc|»orls indicate an k avera;;e annual death-rate amomist insured pi;rsons ot ahoiit nine per thoiisMiid, l>ut not knowinu the nuuilier of risks at the several ajres, we can make no Use ol' that fact. It is not tin- average eost for all ajjes, hut the actual normal cost for each separate aifc that wt desire. If the assured in Canada were all a;,'ed oU, nine deaths per thousand would he a low rate of mor must seek of the " Thirtv Oflices" for our ilata tyc- wu tality, hut if all were a^ed 40 it would he high. We I t ^..ai- r.f «i... orri.:^^,. rwi:,...^ " «'... ^,,^ .i..f.. a 3 ^^ { I 38 jjf'/je Nalural Si/devi o/ Life Innurance. But s))iill wv ituliKlii the tliita fiiniislu'd by their experierice in the Soutln'rii as wi'll as in Mu; Northern States? Kor tlie purpose of eiiahliii'^ rouipniiies to vary their rates according' to the cliniatic. eoinliticnis of the various sections of that vast country, and distrihiite even justiiH! to all their members, the results of past (xperieix-e in the f comparison, is tabulated in column V>. Extending our investigation beyond C:niad;i to the iidjoin- ing States anil T»'i'ritoiies -Maine, New Hampshire, \'er- mont, ^liehigan, Wisconsin, Minnes(»ta, Dakota, Montana, Idaho and Washingtim, we have a volume ot' business cfpiiv- alent, in round nund)ers, to an insiwance on .■>.S,000 livi-s, each of 81,000, for twenty-live years ; and the normal cost wliieli that experience has written for the several ages is but 7(» per cent, of the cost usually collected for the ■^ame ages. This cost,'for the purpose of comparison, is tabidated in colunni C. Again extending our investigation — to New York, Massa- chusetts, Connecticut, Rhode island, Pennsylvania, West Virginia New Jersey, Delaware, Ohio, Nebraska. Illinois, Iowa, Wyoming, Oregon, Kansas, we havi- a voluine of business etpiivalent, in roiuid nundjers. to an insurarce on 8o,0U0 lives of §1,000 each, for lifty years, and the normal cost which that experience has written tor the several ages is but Slo per cent, of the cost usually collected for the same I I ,**»**- ^' *-^:^^ (erience ■ir rutt'H tioiis of II lla'ir L'Dl SCC- .'i-sity is lust' cli- iiatla, — (loaths ivinn in anilina, rkansas, iuiMiln.'r ,s 1.(1'):; ; II Ohio, iiial rost n'ji'ctcil. upon ;i at) iiisn- aml tlu' several I for the latc'd in adjoin- e, \'er- ontaiia, s ('(|uiv- cs, eai'li t wliifli 7(1 per . This iiiiui C I Massa- 1, West Illinois, : nine of •[ iiree on j horinal | I ages IS & le same a,» S^"'**' I Principh'!^ of tin' Safely Fund Si/stem. •diiVH. No aei'ount is liere made for intereeii liiat hy payinj,' the normal cost year l)y vear :• surplus to meet delaved mortalitv is inevitahle, mak- ing this t !"ment an impnrtant I'aetor in th(> cahulation. Assiiiniiig that the interest on this natural surj)liis will be eipiivalent to the interest on the wh^le i'und for six months at I per cent., I'njJitu />''• nut. nf tin rii.' and Trrritories. The cost of insur- ance written in this vast exj>erienee is tahulateii in eolniim I), and this i-; the normal 7 !(i ;5'_' 58 1 76 '59 ;j 3G ,60 'A \ \ Princlptt'S of the Safety Fund System. 41 RESERVE-THE SAFETY FUND. Fifth J'rlitrli>lf. ~- Pn'sidi's tlii' natuiiil siir|»liis in tliu inor- tuiiiy fund, tlifiv should 1m> m rcasimulilc " n'scrvf." to secure persistence of payment as a primary olijeet, and to reduce tiie iidvancin!^ cost to pcrsistint; nicinlKTs as a sim ondary ohject. This principU; contains Mlizur Wri^'ht's third "essential to the permanence and prosperity of ii company" already noted. Wt! have seen that a reserve of ton dollars on each thousand of risk is suilicient to secure its primary ohject ; wherifore each policy-holder is re((uired to deposit that amount as a l»ond to continue his payments. To secure the two-lold ol)ject of this principle, all who com})lete this de- posit in any year constitute a sei»arate class for that year; and, as regards the management of the fund created hy the ir deposits- -called their Safety I-'und — they are iiulepend- ent of all other memhers, each of whom hclongs to the class of the year in which ht» completed his own di'posit. I'^or five years after the formation of any class the interest of their Safety I'und accumulalt's, and thercafti'r it is appor- tioned regularly to the i-redit of surviving and persisting members. When the amount of insurance in force en the lives of memhers of any class has heen so reduciKJ hy death and (liscontinuancc that it does not exceed the amount of Safety Finid for that class, Tiit", suin'ivrxG .\Nn per.sisting .mi:mi5I-;hs auk i'aid i in-: full fack nali'E of tiikiu pol- icies, AS AN KNDoW.MLNT. While the management of this I'und is purely Tontine, it is not open to the ol»jecti(»ns rightfully urged against Tontine systems of investment insurance. The forfeiture is not ri'(jnir<'(l for the i^nkc nf pmfit to pcrxistiiKj innitherx, hut is necessary for the stahility of the system ; and, l)eing small in amount, does not involve tlit hardship attendant upon ordinary Tontine forfeitures. The dividends resulting are not made from moneys lirst collected from tlu- assured for the puipose of afterward returning a j)iirt of the over-payments, l)ut from the interest earnings of tnoney deposited foi- another and a neci-sary pur- pose; and when the fimd itself has accom])Iishc(l its mission, the principal — no longer ncce.ssary to secure the i>ersistenee of thos(^ who deposited it — is distrihutcd to those who, hav- ing faithfully disi'harged the ohligaiions of membership for a series of years, iiave made themselves its owners. Instead of attempting to secure persistence only by the 1.^ pains (jf a forfeiture which grows heavier as the vears pass, S5^M.a»j> fi 42 J The Natural Sytilan 0/ Life In-virance, wo mid to the {K'niiUy of a small loi ruitnri; tlic linpc of tliiH rich iTwartl. I low I'ar the naturally advaiiciii;^ cost of insurance will be rcdnccd hy the (livi«lcnution of ten dolbirs will Mien have nndtiplied miiny times, and the regular dividend of iiitere^t must be a considerable part of the natural pri'iuium. W'e have the data by whii'h a mathematically accurate calcidation of the amount of such dividends and (»f the period when the enrh^w- ment would mature nuirhf br made, on the basis of past ex- perience. Mut that experience was under an entirely (lilliMH-nt system of insurance, and it remains to be di-monstrated by our own ex[)erience whether the rate of lapses under a system where nothinu: is concealed, wheie the insurance is furnisbed at cost, and Ahere tiK're is no heavy penally for forfeiture, will be ^reate^ or less than imder the (dd system. Hence we hesitate to raisi' expectation by calculations from the experience ol' other systems, wiiicli our own expe- rience may disappoint. We <;ive an obli;^ation to appoition the interest amon>iSt persistiny- members of each class, accord- in- ijf ol' this met' will lit (III tlir lirp.; IS ;i own, 1111(1 iinsiihiiiy [taiiii-s on ol' (.'Very • r (wt'Dly IS (liiriiii; tiieiulicr's iiiltiplicd iiiiisl In- liMvc the j I 1)1) of the I V eiidow- p:ist cx- (iilll'rctit Irntc'l hy ;i system furnished trfeiture, I'lihilioiis vii t'Xpe- |>|Kirti(iii ;, accord- is paid, iiulier to tiiiit for I secure nicnts to lutrol of illy dis- lossihle I , ic aeeu- I i ! I d hi (/lily ' wholly I ?B a^'**« i Principles of the S(tfili/ Funil SyMi in. 43 The second demand is iiii|iliasi/,rd l»y the ruin which has overtaken so many lev»d-|iit'iiiiiiiii ci»iii|ianic^ ihii'iii^h the di-'lionesty and ineoin|tetency dis|dayed in the maiiaLiciiicnl of the " reserve." 'I'he c()uti iliiitioiis to this luiid, unlike iho-e to the mor- tuary fund, whivh are Iteinjr constantly disii ilmied, are liahh- to indelinite aeeuiniihitioii. No iimount of sei-urily oilired in advance Ity an auuressive nianaL'cnieiil. for the iioue^l and [irudcnt dischainc of a trust which is lialde to iiecoiiie so jffeat in the t'ntini', could he rc^aided as certainly adei|uate. We may have ahsoliite coiilidence in tin* wisd(tm and iiitc<,M'ity of the manai(ciiicnt of to-day, and he willing; to trust it witiioiit ade(juate, or any, xcurit* ; hut who will he the man- agers, and what their cic. racier, In In re tin- moneys we con- trilii'f.' to resiM've have ac'-omplished their |iur|»oseand found their way to their rightful owneis? If the seeond demand of this |>rii)ci|ile had heeii ohservcd in the |»ast, even if the lirsi had iieeu iL'nore(l. hosts of cdin- IKinies which now till dishonored graves would he healtliy and |»ros|>erous to-day. The |toIicy issued hy the Do.AIIN'KjN" SaikIY i"lM> i-lIK Association gives t'llici to this ]irinci|)h' hy an oMigaiion to (h'|t(i>it the eiitiri' Sat'ety I'lind of each year's class in the ])omini(jn Treasury, suhject to the provisions of the I )ominion Insurance Act, iiMjuii'ing it to remain on deposit until the Cioveriior (leneral in ('ouncil shall determine that tlu' con- ditions iiii'ier which it was coiitrihuled, and which ar«' stati'd in that poli(;y, liave heen I'uliy ohservcd hy tin- company. THE MANAGEMENT. Seventh I'rincjple. — The management >hoiild hii-iiish j security to the assured iii pro]»ortioii to the amount of trust funds they control. j ; This princi|de is a demaiMl of >iiiiplc hiisiness prudence. I ! It has alv.ays heen applied to l>aiik< and other tinancial institutions seeking puhlii' conlidence, excepting only life- j insurance. When it was discovered that t'apilal was not necessary for the siiccessfid operation of life insurance wh.eu prudently managed, men of al)ility and eharaclei constituted themselves managers, and without pretending to give any security for the contracts they wrote save the funds lirst collected from the assure(l for that purpose, they succeeded in ins[)iring \ puhlic conti(lenc(.j in the M)undness of the system and in tlieir \ integrity of purpose ; and now, when the management t,; *"€*«»* :s=fs 11 1 44 The Xatural Syntein of Life ^ isurance. M in other and too ot'icti Irsn faitlit'ul liamls, tin* aci.iiniiila- tionH of trust funds a^^'ri'^atc luauy inilloiis. TIm' faithful aud cnicipul di-* liaryt' (tf such niorrnous trusts (ItMuauds a di^Mcc of wisdoiu aud iulryrily seldom vouchsufi'd to men, yt't the oidy security oticrcd th(»sc whose payuictUs ■•((ustiiutc the trust !uuds is the iicci(h'Ulal iute;,'rily of the iiieu whose fortiuie it is to he the uiaua<;crs of to-«hiv. These scatter throuKliout the huid, aud hauu upon the walls of every piihlic ofKee, lUuniiuated statements of the aiuounl of tlicir trust funds, in cohunus aud lines of Arahie characters cx|ii-es>iiiL; values Its of tile of Araltic! iniiid can :ni«l 111**1) " IIiTC is II i)e in ii ilollars to s to carry kcaltliy on L'(»tnpanieH rii>^ts tlioy his tailor •onipanieH omen MHra- ntly aiianks, unlike insurance companies, retpjire a fully pai- positsand paid-up capital as well, by creatitijja second liability on the part of every stockholder; and this un-f)aid capital is the real security for honest adnjinistration. Tlu- paid-up i-apital of this Association is in the I)oniini(tn Treasury as security, under the provisions of Insurance Le;,nslation, and thus beyond the control of the managers, while the un-paid capital is in tlu' estates ol' the siockliolders, and theie be- yond the risk of embezzlement. Thus is every dollar of the capital the most elective st'ourity. We liave now the insurance purely mutual, while tlie risks of inanajjem«'nl are assumed by a stock company as trustee, thus reiievinj? tnutual insurance of the only danjicer whii;h threatens the system, and mniardinj; it from the only evils that have overtaken it in the p:tst. Eighth Principle. — The nianaiiement sboidd be limited in the amount of moneys contributed by the assure has almost invariably recognized this [»rincii>le, and thereby removed from its contracts the source of many of the evils which have attended the [tractice | of level-premium insurance. •{.} ^ The Niil'irtit .V)/,»^ ;/( nf fjff [iiKuronrr, W tlicH' is li> Im- :i )iorf<'rt iitKlrr^trinilinir Ixlwini tin- A''t kimw tli.it cvt-rv omiiiii»ii Tn-iisiiry — ■ ilicrr to rotiiiiin iiiiiil its iiijs'^ioii i< aliii|. 'i'lii^ cniiiplt'lr iiii>lcr>tati)liiiL' WDiilil lii> iiii|Mi'.':ili|«' if tlir iiiaiia;;*'riM'iii lia^i' of jii-^licc of allot litT to r(»iili(|c ill liiiii tlic iiiaiia^;«'Mniit of one's tsialc, L^raiiliii:^ liiiii tlic |tri'roi;aliv<' of Wrcidjnir, witliDiii I III' riu;lit ofaiipcaj, linw niin-li hr shall rctranl as his own, and lnr iiuw iiiiich In- >liall rmdfi' an account. This r niipaiiy. as tnistcc uf the assured, makes ;i liaiuain ill ailvaiiee to cniidiiet the liiisiiiess for three duljais per vear \'nv eaeh thoiis:ii)d d(dlars insurance, after tiie initial prc- niiiiin In cover initial expenses, has hec-n paid. rhi» provisiuu makes it possiolc for the manaucrs to siK'cify, in taeh iioiict' of premium due. to what |iiirpnsis the p.iyineiil is to lie applied, :iiid the amoiiiit lur each, ins(eaf Iiim|tin,ti all to!;etJier, leaving it lor the company to .Mppor- liou as it will, Xiiilh Pi'lnviph, -TUv maiiaLrcinciit should comply with the provisions of the Dominion Insurance .\ct, ree -they i<.oiorc the paternal protection of their own government, and should expect to sutler htss. Ti'itth J^rincipli'. — The assured should h.ave an effi-ctive voice in the maii:i,ueMieiit, and should rtuularly he informed of the condition ol' their husiness. KHect is yiven to this principle hy tli" constitution of the annual ineetini;. at which each [lolicy-lioldi'r has a vole, 'i either in per.sou or by proxy, for ouch thousand dollars insur- -j.; ily < 1 u\v tli;it its (|r«ti- •lijiru'*' ii If Safety till until Ic it' the (I as its rrity ami la^'citiciit it'citliii;^, I'll as IiIh I Itar^ain per yi'iir lial |>i'o- lam-'i"^ t'» |iusis the I, iiistcafl to ai)[>()i- )lv with liriiiU a •|>(i>it of iii'l that »m|>aiiy"s "iiiul ill- riidi' I in 1. ami W [ I >>iii/,inat'h iiicinlM'r. Thf iiit't-tiiiu' aiiiiiially t>li-cts Ht'Vt'ii ilirt'ctors- thi'cf liy iin' vnirs of mh'IiiIhts ajoiic, thrr»' hv thf votes of >«t ai-coiiDls of th«> Association, aiitj nialnrance }»y post-mortem assessments," avoiditiLr. alike, tiu' dangers and detects of the old reserve plan, and tiie weakness and uncertainty of assessnu'iif systems. It j,dves edect to the motto. " Pay as you ^^o^ jiiid i^et what vi." we fiave used only the recoj;ni/ed mathematics of lit'e iiisur- anct*. If the reailer is not satislicd with the solution the fault is in the mathematician — not in the mathematics; if he is not convinci'd of the soundness of oui- principles, the tanlt is with the writer who has attompt-d their vindication, — not in those primiphs, which are ,i-, riiduiiui,' as the laws of nature that ;;ave them lii;tli. I'uMowin^ ^o implicitly the teachings of the past, our system cannot Inil l)c as entlurinu as time itself, capahli' oitull'llinir it> one mission to provide siistenaiirc t » the widow, and home coml'orts, with the mians of winoatiun to fatherless children — throiiyh all the years lo come. I i^**-***— : I 'i f R W ft ^ ;^ M > (0 w a h w b 1 r ft w «^ 1—1 i « w <1 Cd W ti H w t< 1 8 ' i 8 > ;. 1 5?? I Zi — 8 5. t 5 c — jf - — o J M i a 1 •s t S ii z :; 5 c a n a « e E V. V « ; £ « V #■ A ^ c r f • .til is ;^ - = ^ .5 « V !> ?■■• .*=< 'la ■r. it s s o a) S ii 7 u. H 2 J* * i Wife j< - ■'^ = ._ ♦J ^ '/I .a = ""I I 1 ^ 1 -t - S f a. « s V b es /. ■f -E •2§ 3 9 z i ^ III 25^ — i s 7 s .i s c •- i..- s « s . © _■* «^ , His 'f. •- — s r»» — t -t. -r. (4S) — «-&•'« § ?-^ I -.» ( V L. m flk . ^> ^5 j,f V ^ 2-r* a 3 C '' M) 1 iii « .- s ':^' ' >.'S 1— » v, « Sim ^ * A "• • <• - /. V ^2 = - '^ ^ T ^ < = t"^ S i* £ ai« 1 e « 9 © ••• t .> - - i- ?- r.: 2 «• • s ^« • *• = ici _ ->^ •■ - 7 Am i<5 ji. iS i-"z:« - - r. ~lil i"^^' 3 S S " 14l -• >.=:>s i-r-Ss fc. ^ . K — .- r. tfc s =.r-'^ K -s b = 1 r. ■- — s ?'?-i:-^' I'^t^ ?> -• .- C "^ ' i 5 i 4^ « M ^^ __' **•-« ?->fl Ij; J 1 .S" a e 2 I « z f it •■.£ •" r ?: V «» « 5f2 S8 " *.-« * 2 c « .V t V ■£ • w.: a - ■^ Z «&" 9^!s ^ a. i' l» in r: — * ^ •■ ^ • V '' «i,i . 11X11 Tf<- Irr ? 13 J •• -r r V .i ■= = •: r I is -r / 2 .. ■^ L' i i - "^ (10) i 9 M a V 5 •= * -** s 2 5 « i a ^ i! i ^' / z i 3 « :■ = >• s s ? ;= = . " * »^ 5 u ^ ••• — > _ T E.— 2 s- n c ~ >. " r 4, Ij 5 .- = c IS .£■7 ■I A 51 S 5 i I. o 2 • = =— ^ = = 1 f ••*♦', •J TA«! Sfttiirnl Sifitirm n/ lAJv Inmirnnrt, • ! VIM. (•o.MpAKiNs>4 ui' llio S.'ifrly KiiihI HVMtt'in linN iH>i>n «'stiil»* IihImkI liy rccotiriliity: ii>« pi-iiici|)|t»« with llir iliiiiiiiMlM ofiiiHiir* iiiii-c ••(■ifiirc, .'iii oil IMIKU 40, ill'i' !|)li'i|il:ilr is xlmwii liy tin- ('0||-iilii|:tti>i| *'Xpi>ri<>lii'«> itf iliirty Aiiii'rifMti oliiccs in ( atiinlii ami Iwfiity-livr Nortlii'in Stiiti"« iiinl 'rmiinricM ; tiiiil wlitii we roiiMitJi-r that that i*X|)0* ririiiT iiicliii|r\|)i>rii'tiri* acciinnilati'il, thf aiioinacy ol' those |imi)iniiiH is |)lai'i'«l lii>yoiii| i|iicstioii. 'riu-rrl'trc. w«' can coinpan' ri'snll'^ with the lu'st h'V«>l- |ir«>iniuiii coiiipaiiy. withoni tiH.^umi>i;/ that oiir systi'in ilt I'ipially soiiml,«»r that our prciniiiiiiH ari* a(l«>xp«'dit>nt. NVf ask such to carcrMlly rrad what follows and Htiidy the cahnlalions hy which wc compare results. The (■;tiiada Life is the oldest and lar^'est Canadian level- premium company, and has latterly heen wiiunnu a reputa- tion over its competitors l»y the eomparativr richness of itH ilividends. Ii iiirnishes us the means for this comparison hy advertisiiiL' the diviilends awarded the holder of policy No. Ml. issued in IS IS. which we m.ay fairly assume is as i;(K)d a showinj,' as that ( ornpaiiy can make, llavin;,' received his dividends hy " hontis adililions" to his policy, he has paid thirty-seven inn'i'urm premiiiius. lU' "honus additions" is meant that the dividends, instead of heini;; paid in i-ash, are ap|>lied to the purchase of fully p lid-up insurance, whii'li is added to the j)olicy and payahle therewith in case of death. 'I'he Company sayH : " It ninnot hf fiH) plnlnh/ nUttiul tliat cnrJi lunilf is tlir t'tjiiii'nlriit of t fir atlier.^' Aecordin;;ly no exception can he taken to our selection of this mode for a comparison of results. The next ipu'siion to settle is the value of money, lM>r the purpose of ;i fair comparison we must make a Safi^ty i t • 9^9 ?rts 1 I'M fsllllt- of lii^iir- iixiir;ii)t>t> iinriinirv ft pnuf 40, r'u'in'*' of I Nortlii'in ! ml rXpi" I hull y/v ' f ('iiniiilu ' 4 of lliat iri'iiiiiiiuK t?Ht U'Vrl- yMtt'in in hi it It hitve '\ rt'siTve .•<()ii by ilii'V No. '^ootl a iv('(l liis la-^ paid >, iiistoad of fully |iMyal>U' // ri I It not }„■ other:* ■ctioll of ly. 1m )r I a" Safi'tv -k; (hmpnring RntUta. "1 Fntid policy n*iii(>iM|M)riiiii ii|Ntii ilif iMrtiinuM of lnlt'r«i«t hy I'Amt raliN. NVIiai liavi' llii-y ln-rn? In Ixm;{ (|ii> aviTauc iiilfrrol •'iiriiiiiuii ill iitl lite ( atwiiliiiti roiiipaiiii-s untilnl it\x aiiij a half |M-r ci*nl. — >ti» Muy« I'mf. ( lurriiiiaii in hit report t«) l*arliaiiii>nt. MtMiry liMH not IniTi'Mxcil in valiu': it hriM ilri>r«M'|iil<> NiiniM hM-knl Hp in lifi- in<«nran(-«- havr paid a hiuhrr rati* on rnonrv cMiployrd ax I apiial in ilii'ir IniHinrHM; and rvcryiovvn and villajfi- throiiuhoiii th<' coiintry han iiM " promini-nt riii/.r» " who liaM an'tinmliiti-d woidlh liv ilu> inauic of roinpoiiiid intfit'si at the hi,. Iicr i:itrH, ( iivini; the ( 'ornpany tin* hrnt lit of th<- rxcfoH, WT >iiall Mrh'i't Hi\ and a half p« r tint. a rati* Inurr than tlw avfrayi' for IHH'A. Winn in ihr fiitiii't> the coinpaiiy fnrniHlicH \\h its rcsidtn worked out l>y a lower rate of interest, we Mhall make another ealriihition and >ee where We stand. The hnhhr of I*oli<'y No. .'J4 iiniMt have hiM-n a voinm man in l^*!"*. .\> his airt', .iiid the amount insured, can make no prop) lion.al tiillerenee in the result>^, aeeorditiv' to the eomp.any^ method of aw.irdinu dividen, thf )U'emiuni on whieli hi th:it eompany is >(>"> pi>r annum. jj't us siippoxf that every year when he paid ^\)'> to that (Mimpaiiy, In- laid aside another SD.'i for !i,tKlO insiirane«- «»n the Safety I'lind system; |)iiid from it the natural premium hy column "I>," |)aue 40, (addinu the initi.-il premium the first year, and the stipulated e.\peu>fs every year); and invested the halaiice where it was not heyond his own vnn- trol. The sMvinus have :i('ei!mulaled, and had he died in any year, their llu'ii amount would have heeii realized to his estate in addition to the ."^.'),(Mi(i insurance upon the Safety Kiind I'olit y. riieiefore. tlio acniiiiiilatctl .savintrs out of <|i<> >t,\Kt |M'i' .v(Mir, ahcr payiiiu: the natural pn-iniiiiiis, an> <'qiiivalciit. In <'a><' of dnitli, 1u ** Itniius .Vdtlitloii.s" to tlio SalVty Fiiml Policy. As we have no data from which to 'c///(/,s /rom $!Jo per annina hirrste>l by Insiiml. IB S - J2 - •« /! a '" O 7) o X < I « c ,2 « tt It y >- : * - i .£ « 2 ■" ■*- i ~ "j: ± :.' " 2 .„ *" a — 'I -r .Si)-' *^ 5 tr 3 .'io 3,(;23 ,S5 l,5aT 36 1/MWJ 08 i,8it ;n l.fXJJ) 30 3,133 13 3,303 00 3, t83 01 3,670 83 3,8(»7 8.-I 3,073 86 3,380 43 3,514 73 3.750 00 3,005 45 4,351 33 4,517 86 4,705 .{3 5,084 03 5,38.? 81 5,«>04 57 2? 3^. = u - U. 4. -^ :<•/:■ = r- ^ Z 2 f> 8 0,748 3;5 6,537 (),748 .35 6,(566 ••.,748 35 0,8! 4 6,74.8 .35 6,060 6,748.35 7,133 7,373 35 7,303 7,373 35 7,483 7,373 35 7 670 7,373 35 7, 8r)7 7,373 35 8,073 7,998 35 8,380 7,998 .35 8,514 7,998 35 8,750 7,998 35 8,095 7,998 ;C) 0.351 8.6-_':! 35 S,(;'J3 :'.5 s,i"i'.':i :'.5 s,r,ii;5 ;r> 8,1)2:; 35 0,517 0,705 lo.ysi 10.3S3 10, (»U 36 68 21 30 13 00 61 83 85 86 43 73 OO 45 33 8«; 33 02 si ">7 Eh O ."4 36 — /. -. 4 e ^ .2? 5 r. z;-- r. .s, r - ^ .t * ^ - -^ Ik ■- — .^ - C Yrs — '220 99 i 18 — SI 67 ! 19 65 86 ; 20 330 85 21 383 78 I 22 — 70 26 \ 23 100 36 24 307 47 j 25 ' 26 27 28 29 30 31 Average, 404 50 700 51 301 07 516 38 751 10 ;>;)7 10 1,353 07 32 804 51 33 1.171 08 l.4<}0 67 1,760 46 3,071 33 6 53.3 4 IV, W. 't pmlits { 'dill $<)0 ^ a r. — ,2 - ,' Yrs !ii Jt9 : 18 -1 (u i 19 5 86 '20 1) 85 21 ;', 78 22 ti 'jr. 23 ) iG 24 ^ 47 2o I oO 2C> ) r,i 27 1 07 28 ) :j8 29 1 10 ;io r 10 .■•.1 i {>7 32 51 :W 08 :;4 > 07 :;."") 40 Hi". '2'> ;.- .34 •••^J-i^J^ »^- :^ ^ 1 1 CompariiKj Rfxulls. 53 Rich as were the (liv'uli'mls imkUm' I'oHcv No. ?>4, the nssiiretl \\:\<^ rnjoycd, (liiriiii,^ the years of ('(Hii|»iiris<)ii, an siveraire ft' ^0»'»Il.;J4 ii'-r iiiiinun — over 13 per cent, of oviiiiiial pohcy — more insurance for tlie s:une expenditure nnder the -Sdjilif Fnml Sijxtv.m with savin.us invested. lint till- idfilf h'lls imlij half flu- xtiiri/. The assured is now si.\ly-onc years df aire. Tiie purpose of his insurance is accomplished. His family are no longer dependent, and |)er- chance he needs iijs accuiuidation to prt'vcnt hei'oming depeii- dtiit himself. For >^U') per .iiimim he lia^ had assniance under iIh' SuH'ty Fund System, with invest iiu'iit of saviiiy:s, iii- ercaslnir IVoiii S5'k<><>^> <<» J^IO,(}J>4.'»7, aiwl now he has his Policy in Ibree, which he may surrcinicr or not as lie eiiooso, and >5.>,(;1>4..'>7 in easli to uso as lie will. For 80"> pel' annum he has iiad assurance under the Levd- Pifniiinii Sjisi'iiii iinri iislin/ jroiii .'^."),(l(l(> to SS,(1'J3.3'"), aiul now he has only a policy, tiic terms of which make no just provision for his ceasing' to pay premiums and withdrawing liis ueenmuhitions. We shall suppose the company to be liberal, and give him as ;i surrender value seventy-live per cent, of his reserve on oiiijiiial poliri/ and bonus widitiuux. (Many popular companies give but from twenty-tive to fifty per cent.) On this liasis the comjKuiy woidd give him, on siirren- dei, SU/jrto.itO, a!,'-ainst a cash accumulation for the other .SJ)o |K'r annum of $."».<»04.57 — a cash diftcrence in favor <>f the Safety Fund System of insurance, with investment of savings, of $2,4:38.07 — an advantage of over 75 per cent. Is the high Reserve expedient ': Even should the company do what none pretend.s tO do — yive the full reserve value of this policy and **honus additions "in cash; still the policy-holder would receive ^ !,:$'»:{. 7 7 less than liis cash in hand resulting^ from tlie same annual expenditure on account of his Safety Fund Policy, whore he did his own banking'. — (Am. Fx. Table, 4'. [ler cent). Is it expedient to waste even $1,350 that, in the future, may be saved by insuring in the Dominion Safety Fund Life As.sociation for protection, and leaving banking to the banks ? We shall now ask the reader to go with us beyond the domain of definite calculation, but not beyond that of reason- able en(piiry, to examine the feature of the Safety Fund I r r>4 37i«; Ndtural Synlein of Life finfunuice. •^K**, 1 System omitted lV<»in tlu' jiliove couipurison of results — the Siiffly Fimil its.-li". The (liridi ikIs on IIip lift^rrvf Sj/xfnu nrr iiirJtuh iJ lo the forr- (joiiKt comjitiiixon, ns \vi' liiul the data tiiniislii'd l»y aitiial results t(» determine their atnoiiiits; hat the of twt'uty years, tho divivoulil exceed $S(); and when lediiced to twenty-five the dividend to (acli woulil exceed ^1(>0. If the class fund is composed of deposits on but one million instead of live million of risks, the amount of interest would be !)Ut;?800; but the policy-holder in (]uestion, having five thousand of insurance, woidd receive Hve-hund- redths or live-lit'tieths or five-twenty-fifths of that am(»unt, makinsr still $40, $80, or SKIO his dividend. The nund)er c()mi)osing the class makes no })roportional difterence in the re.su Its. The compound amount of all these dividend.s in excess j of the compound amount of the fiftv dollars the policy-holder t,^ __.^: ^ , I ■f A" )i ^ Is — tlie (he fore- y attiial from the >(' (Ictcr- iiiiii the uu'c was cost in- ;«'.sm//.s in mount of •rrspoiid- 'isiirtivre. polu'V- in the y l-'imd I dollars feu) who his fund poll our V li(tlder Safely which tcr over to the luce the |, which twenty when [I ^SO; would hsits on ount of jiestion, hund- JtiKMint, iMunhor ill the excess Iholder *x» 9 ^ > I Compnrin(j Reunite, 6-") hinisclfcontiihnted.slKMlM bo n(1J>'.M^.r>7« and acciininlated dividends, to deteniiine the wiiole ad- vanta;?e of the system iniiiin insiiraiiee. AuJiiii, we ask, is the hi^di Reserve ixjiedieiit ? Endowment insurance. The |irect'din<,f compdrliiiiii, of /•('x»//.s is hased upon past rates of interest to correspond with the rates hy which the dividends of tiie level-premiiun policy were made. We shall now vary the comparison, ai^ain leavinjif out lh(^ Safety l''und, and compare results with an I'aidowmeiil iVdicy hy level-premiums, and four per cent, iutei-est. Insurance (Commissioner Tarhox, of Massachn.s«'tts, in hi-^ Report for 1SS4, says: '" 1 am moved to expri'ss ;i regret, shared in, 1 believe, hy the i-onservative and most sagacious nun in the business, that our insurance establishments have adopted schemes of insurance wlifiehv thev have become 1; irireiv institutions of investment. Twenty years aLfo endowment insurance constituted less than one-twelt'th of the business of the companies. Now it is fully one-fourth. ( )f tlii' present funds of the companies, not less. 1 judLie, than a hundred million dollars is accumulation on account of eiulowiiieiits and Tontines. This may be legitimate, in a certain sense, but //a.s /(() just relation to life ///.sfuv/z/cc 'J'o unite, more than need be for the assurance of its contiacts, the proper business of an insurance company with the functions of a savings bank, makes a combination both incongruous and un- wise. That the ordinary short-term I'lidowment, which is a little insurance and a great deal investment, is not desiral)le as either, /.s capable 0/ mathnuntical dc)uoini null ii'-iisiltililii,-< iij tt hnii/.i'r in (hiililion In lln: ohlii/atiiins nml rt'xixtnxih'litieH of an insurer^ nnil pnjnilin'H itn if'tji'tji «.s an in. '■■lira net' inntilnfion hij < rpiisiirf In lh<' iliimicrx inri- dvnt to its hankinij iiperalinns. if these |iropusitions ai<' well- founded, it results that soinxl policy hoidd reyard with dis- favor the inventions of investment insurance which reeent practice has iniwisely grafted on the (Miyinal system. "There is a moral as \^-ell as commeri-ial and politic side to this matter. The only leiritiniate income of an insurance eomjiany in the nature of profits is the jiain tVom its limds. All of its other revenue not iiseil (av payment of losses and expenses is justly due to he returned to those who contrit)Uted It, not as profits, hut as overcharge on lost of insurance. 2^liut an irisiirnnir cniiijuinii eomeho(iy ffains someliody else must lose ! ^rassachiisctts has si^nilietl by Just lejiislation her disap}irobation of such mercenary commerce, an V V / i w< 1 Illy III irlxidy cciiarv atioii." (I ever iiii; uti same Insiir- woiild skill lUiiiiisl itiitiiin liaiicc! liinclv irunce if he some !«' ad- wliioh f M i f Comparimj jResnlls — Endowment Innnrance, 57 1 Makiii}; tli-pusiis in a Savii!;;s rii-^titiiiioii aloiu' is not Kiilliciciit. TIk' risk (»f" dyin^' before the deposits aiuoiint lo an atle^o,(»(l() in- rai.ce in this .\ssociation. addinij initial premium the lirst year. Your bank account — endowment — and your insur- ance will stand each year as in the followin^j COMPARATIVE TABLE. ) "' "~ '" 1 2 3 " ins rt :5 S-^ ^ ' ® .=■ J3.t © ^ Si pZ -^ *Z* -^ YEAH. S.2 >. C «_2 U Oj Cn ills •5'' «C w = a> V YEAK. £6_- i - _, o r Z ij i~ 3 E ^ "' > n'O V a s '"fcS^ ■iil ^-( ^ i^V & s 9 «'" ■ • 1 1st \ OH r. 5,U()t) 0(J *^.-)K :i4 5,258 34 5,000 00 1st i 'ear. •2nd 5,000 10 r,r,o 10 5,550 10 5,000 00 '-'nd (( 3id 5,01(0 00 85 « 70 5,852 70 5,01)0 00 :jra 4th 5,000 00 1,100 o7 0.100 57 5,(100(10 4th 5th 5,000 00 l.lSJ'i 1« 0,4!>2 10 5,000 00 5th H 6th 5,000 00 l.K'iJ* 94 0,829 94 5,000 00 Gth u 7th 5,000 00 3.180 40 7,180 40 5,000 00 7th a 8th 5,1 '00 00 '^,.-.44 05 7,544 05 5,000 (JO 8th ti t> r '< '??a '**^2yB Insiir- )\vnK'nt iniie to .'(1 SlU'll cKpitai IVIlnMltS >t only w Old, whifli, )lt ad- iir one, ,'i(lends oni the 'here a und is a pre- s high ) i i CompnrlrKj lieAultx — Eiitlowmeiit fnnnrnnce. r)9 ^ as is provldi'd for in the premiiun -eale of this Association; and money worth (»idy 4 pfr cent,, no ri»'Vel-I*reiniinn ( 'oin- !>any would make any divich-nd whatever. It is expensive tankinir when the agent receives from twenty-live to sixty per cent, of tie.' first ^!»<»; another at end of ten years of ^27*J.<)0 ; an»ish his patrons with the munificence of his company ; hut when those results are tested hy cold cal- culation, as in the [jreccding tahlcs, the astonishment is that such companies ever for an instant held a place in popular favor. We have seen that the boasted results of a boasted con> l)any are over two thousand four hinidred dollars less thar; the deluded policy-holder shouhl receive for his expendi- ture; and the (piestiou is forced u{)on ns. What has become of his money? We shall not attempt an answer, ()ur task is finished. We have taken tlu' reader through the lal)yrintlis of level-premium mystery, and dispelled many of the delusions which those companies have fostered ; we have laid bare the foinidations upon which their dogmas rest, and exposed the many fallacies of their creed. We have pointed out the weaknesses of assessment systems, and shown how alone they can hojje for permanence. Yet, those systems, with all their weakness and uncer- tainty, and the level-premium system, with all its injustice, all its inconsistencies, and all its abuses, have been ati untold blessing to our race. l*\)r generations they have sweetened the sleep of millions of devoted husl)ands and fond fathers, as with throbbing brain and wearied lind)s they have laid down to rest beneath the \*f] aegis of the life insurance contract; they have softened the SJ' S^,.^: J Z ft 60 \ The Nntural Sy.ilem of Life hi»nrance. '^"'^ pillow ol'tfii thoiisarul siifien'rH, and rolilM-d tlt-atli itself of ilK Hliarpi'st i»auK ; tln-y have «'ntc'iH'tl tli(»M> lidiut'H in ilicjr darkest hour witli lilt' liulit <>l liojn- to llic widow's lieart and tin- (•arnt'si of continued JMMnf cotutorts to Ium' fatlicrUiHS haltrs. VVImmi we «'on.sid('r liow noldc is this ono mission of lite insurance, we are ain.i/.cd that i^'iiohle nieims ever have lieeti deemed necessary to ^e<'ure ii popidar favor, that it ever should have heen allied with the vice of ^'ainhliii;; specula- tions, — that it ever should havu fallen the victim ofgras|)in^ avariiM'. The j)ulilic have heen cducal<'d to rcLjard lift' insurance lan ,h at It Ti deh what It IS not, rathei _ , sions, — to remove the dross which too loni,' has concealed the pure jrold of life insurance as protection of the unity imd comforts of home after the arm which iijiheld it is |iaralyze(| in death, — to redeem this most henelicent of human institu- tions from the ijrasp of error and of evils, is a task worthy a more potent pen. i-lrror, lon;^ rooted, is slow to die ; evils protected hehind the hulwarks of inordinate yains are hard to dislodj,'e; hut "truth cruslud to earth shall rise airain," and in its rising' we shall wittiess the triumph, ail over this hroad Dominion, of the al)i •*i«-'?iH f Al'l'KNDIX. j hi TAILS or SAFKTY I- I'M) SYSTKM. Tmk Association* f'lrnlslu's aMsurmu-o it) tin- lollowinu' atiioiitits : Appliciiils (ifttfn, liiit not iiiorc tliini fifty yt-ars (if a^e at laHl Itiiiliday, fioiii (iiic to live tlioii^iiiHl dollars; til'ty-oiio, but iir»t luort' than firty-livc at last liirth«lay, iVorii one to tlirrc tlioii-aiid dollars ; (ifty-iix. l»ut not iiiori' than sixty at last liirthdav, oiii' or two thousand doMars. TIm' prcsont limit in tht amonnt of assurance ofil'rcd will be exttMuU'd tVoin time to tinii' as the Association grows older, m prudence shall permit. Kach application must he accompanied hy the ! INITIAL PREMIUM. «10 for Sl,y the lollowiny table, which are payable iVoin the issu»' of the policy. It is to be collected l)y the aijent wixt receives the application, and it« amount, less cost of medical examination, will be returned if the risk be declined. The renidar premiums, as per (altle, are to be remitted to the Home < )ilice, uidess a special notice under the hand of the SecretJiry direct their payment to be made elsewhere. Quarterly j)remituns are regularly due on the tirst of March. June, September and Decembir of each year, of I which thirty days' notice will regularly be given. i,^ Cfit) »s \ 02 Apju'm! IX. To Krlntf tlip prrini M.. «»f tin* whole rncmlu'rHlilit dm* itU tlnsc «liiys, thf jiinf ntu- '/ uiit hr tin t'lrn tjiuirtrrli/ pn- miiim, liiit Hiicli II |iru|K»rli"i 'icrcnr um will rany lln' [Mtliry to next n'uiiiiir <|iiiittri- diiy, wlu-n tlu' HrHl full iitiartcrly prcinitini will In- iliu'. If, huw«'vt'r, tlu' tliitf of isHiii>JM> williiu lliirly ri>rniuni, «l«>tcrniinf*l hy tlM> ditto of iKsiif, will lie cinlorsi-d (m the hack of each policy, and a notice (hci'ciir will ht> mailed to the addrcsn of the entraiil. Its payiueut iniiHt \>v ntJuU* hefore the |tinLr, he can do so l»y en(|uirinir the amount of hi^ crcM rd A rb "1 Ills; s;m1(1 I lis tor 1 of U lir.ilUM" |onu:il owing liDtaiii 9 |ill be ^^ rp f DttniU nf Sufrty Fund ^ntrm. 63 1 1 (l{>t('rriiin*'« liniilri-r (|ii!irti-r, on rarli tlioiis;iiii| tluHnrs iiiMiitiiKr ; wImtc* fon> rarli i)oti<-<* aixl r(>(('i|il I'ur jirfiiiiiiiiis will coiitaii) ail it<'in of Tor. |MT .* iiiHiiranci' for lliih |iiir|ioKo. Thus, for trn (|iiiirlt'rs, or iinlil llic Safi-Jy {•"iiml dcpoKit of .*l<> |"'r >>l,(H»0 insiiraiiiT is nitii|>lt'trN nnd receipts, Htntiny the anionnt of r;v*/i7 «-» Stifdtj Fund illri(ltii*l,()(t() insnrance, for example. A policv holder reaches tlial age before he hiw completed his Safety ^nnd deposit. His pri'ininm, as stated in column A, is $'A.7'), and is analy/.e The table gives the premiums for one, three, and five ^ thousand dollars insurance, from which that for two and for ilji four thousand can be readily computed. a jj^...^ . OW— '*->^ 3 ej<-'' rC (;t AniHntlir. i s 1 j < TA-BI-iE illU Of Nntural Quarti^rly Prmiumx, indu'iin^' Exp'Uiso of NaaafMIMi oVtT iM't'-J 1 TlllHTY Ornrh*' IIXI'KMIt^Ml-K IN « .\!«AI»A. *M» TWKN T V-I'lVIC 1 1 NulllMIIIN '^T\'t'« \"XI> Tl IIMII'Ultl » IMtl'll Tlic Hiit« ty FiiimI l>«'|ioHlf ol' Hl» nil riii'li 141, OOO liiminiiii'ti 1 wnultl li«* <'oiMpl«'t*'*l '•> |i)i>lni( ii«'«'or iiiciitN uuiild li«< 1 iiiHo roliiiiiiiH Ii«'U(I«mI " II." IIMN «l,ooo 9.1,000 il.%,oon A(>K. — .V«»K. > ^ 3 A. B -A. 13 |>«'r"«« — . . .^ - i ••till' into 21 «:» ift •-•1.1 §!»».•. ^51.1 vi:, 7.1 911(7.1 Mioji own '.'; .1 17 '.'17 It .11 « .11 1". H.1 ID Hrt v; IIIOII 1 2» ;i ii> 2 10 .17 .17 11 01 10 0.1 'j:t 84 K21 i 2 21 0:i tt ti:( 10 0.1 11 0.1 '.M 2S 3 w a 'in Oil on 10 M 11 1.1 ^.1 E 2A :J IM -J '.M '.» 7.1 , .*{ :li '.» :w 10 0.1 7 o.i lo 7.i n 7.1 20 1 :«) « ai» 2 :ii> 10 17 7 17 10 01 11 01 :io llV»'H 81 8 4U i 2 43 10 'J.I 7 JO 17 H IJ 11 :il ■■! of X H2 8 47 i 2 47 10 U 7 11 i; .U I'J .'11 :»'-' (j, (.|| 88 3 ni -J .11 10 .-,:l 7 .i:l 17 1.1 l-J .1.1 ."..'J 84 3 .V» 2 .1A 10 I'hl 7 Cm 17 7.1 l'.» 71 'U Vt'UI' 30 3 00 i 2 00 10 77 7 77 17 0.. IJ 01 :i-1 ,s 86 3 63 ' 2 «3 l:{ r. 4:{ 4 i:! Pi 'JO l:t '.i) '."J i.i .i.'i 1 .14 .1 <>7 4 r.7 17 01 1 1 ol "j:; ;i.i .14 1 M .1 0:t 4 O.'t 17 70 1 1 70 •-'» C.l .1.1 1 so f. -JI .1 JI |H ti;{ ir. ♦« 'jf. 0.1 .-.i; i 87 f. ,11 .1 .11 10 5;i 10 .l;t 'J7 .Vi .17 ( TiH ti s:', .1 h;i 17 40 'JO 1(1 .I'' (. ftO 7 10 , (i 10 IH 'u UO 0.5 "'0 1 1 60 ! 7 .10 ' fi R» 1 lU 77 :« 9ff 1 Go 1 1 1 N. B. — The ext't'ss of coliimti .\ over coliinm 11 for itn i ' f (liiartcM •8 <'()ii8titutc.H tln'Saf«'tv l''iiinl. fidin wliith ever iiirrfas- i .> ...... _ K 5 ir* 5-» nlr*um.t^ K. ^s.**"** • »»^»-^» 1 * ^ip fansi^emflot. WTV-I'IVK I lll<«M|-||M« «• )ii^ Imm4| AOK. 7rt M ii:. in w 1»A I.*. I |1 to .'I •/,' 27 21» :{f) :'• 17 IS t.) r.ii M • •I .'.4 .'ill rr, .".X .'lit fitr It'll ilK'l«'!IS- hthtih nf Sifih) h'uinl Sl/nhm. 1 iim iiukIc Mil itll |)«ilirii'<« ri'tfiMicri')! in iiin cKfx* over iivf vc;ir», wliit'li will hrufly r<**ltii'i< ilii> |iri>iiiiiiinN to {H>r«i«iinu lurnilirrM. 'I'Uv |>rini-i|itil of tin* Sufcty Kiin«l will Im> hm'iI to |»;iv iiti ctiilDWliii'iit <(ii (III* liiMt |Niliry in force of I'iU'h Milt' liiiinlri'ij rt'ifittcr'i'il in miy i I:ihm. hi viili'iitlx from lhi« ftiinl Mill lie ri'iichcil two yi'iiM i*iirli<'r l>y i'uiii|ilt'iinu ilif •IfiMi'^ii ijiiriii); tht* y«>iir of iMitry, uidI (Iiih iiiiv ini'iiilM't' iiifiy ill' it" III' ili">ii«'N. INSURABLE INTCRCST No |M»liry will lu' wriiii'ii in fiivor of or iis<4i|fn»'»| to jii»v |i)-r<«( in tin- life of iippli- iMinl. Miiri'iril woiin-ii will In- insiiii'il only in fivor of tlicir own rliilijrrn, fxi'«>|>t wlifti tlic lu'iu-tiriiiry lia>« an actiiiil niont'yi'il intercut in tin- pro)>o«i'il life. Extra Premiums on Hazardous Risks. Thi* exiitTifnoe of tin* " Tliirtv ()lH<'i;s " ^hows bevonii an\ qiicHtioii tliiit tli<> rink on fciniili* in ^r«*itt«T lliitn on male livt'H Wlii'ii'luii', to |iri'si'ivi' »'i|iiity. iin i-.vtra pn'niiiiin of >t'Vfniy I'l'iit-' |H'r i|uart yean* of u^^v. VaC« I NATION. No link of ilcath hy nmall pox will In- nsMiinuMl I'xcepi on iMi'iuhiiw who have ht'i'ii t'tH-rti vi'l\ vaciinati'i!. Ihosf not vaci'inatfil iit tiiin* of aipiicalion can ohti'.in vaccination within iMi days, or thi'y will Ik? reipiircd to relii-v** the Ahho- ciatioti III' lilt- risk of ^inii'! pox hy a claiisc to that cited iiiMTleii in ihc policy. lAini OF KXTKA ^I'AKTKKI.V I'llKMItMri, KOK KAi li IHolSiANU iMil.l.iK.S KISK, I OK IIA/.AKI>iil > oeCC I'A I H l.\ . I HanKiiKf Mn.iter <»u TriilU"* »1 tuHtt. F*eri;i. ~ion Ca[> Maker. I'itman in Iron I'oundry. Inuldler in iron Foundry. Sailor (cumiMnn). l'nder;,Monnd Miner (explosive). White Lead Manufacturer. \\\ other Fxtra-Hazardous Occu- pations. sy t»**» •*'»»'l!Sl?|3 I f Continued. 1 00 1 (H) '1 00 1 00 2 00 iniers, 1 (wj 2 00 1 (m; 1 00 1 no 1 50 1 00 1 00 2 Oo 1 m 1 00 1 0(1 il by urer. ulc»»r. Hiiidry. oundiy. f r (explosive), facturer. [azardous Ocou- •*«-»JS^