]Vf AQG A " VI i . . - ,' \ -. . - > Jt. L. J * < , THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES UNIVERSITY of CALIFORNIA AT LOS ANGELES LIBRARY ELEMENTARY TEXTBOOK AND ABRIDGED MANUAL OF INFORMATION AND SUGGESTIONS For Field Representatives of the MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY SPRINGFIELD, MASSACHUSETTS By Charles Warren Pickell Detroit, Michigan 1917 THIS BOOK BELONGS TO THE COMPANY AND IS LOANED TO THE FIELD REPRESENTATIVE Copyright 1917 by MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY Springfield, Mass. 8771 PREFACE In the preparation of the following pages, the clearly expressed wishes of the Company to make the text brief and to the point have been carefully respected. A vast amount of material that some might regard as both cognate and essential has been excluded. No attempt has been made to duplicate what the solicitor could find plainly stated in our circulars, policies, and Book of Instructions to agents, but the aim has been to reinforce such information with other kindred matter pertinent to our work. Emphasis has been placed upon our policies, values, options, and other salient features sometimes over- looked or minimized, and how to sell them. Space has been devoted to the agent's work, use of his time, how to express the dignity of his profession, how to conduct himself, etc. The great subject of salesmanship has only been outlined the foundation, growth, and history of life insurance merely mentioned only a digest of the Massachusetts laws is incorporated. The Company's purpose to provide a manual that would be especially adapted for the training of new solicitors, thereby saving the General Agents' time and labor, and at the same time offer certain well-tried plans to the more experienced, has been the author's guiding star. The book is not exhaustive. It is not an encyclo- pedia of the life insurance business or an unabridged treatise on the fine art of salesmanship. To the 4 PREFACE untrained field man, it is believed, it will prove an instructive and creditable monitor to the more experienced, suggestions herein offered may lead to the designing of other plans quite as profitable new to us all. The text is so interwoven and correlative that some repetition may occur. This should serve to add emphasis and so aid memory. LIFE Human Life is a profound mystery whence it came of what composed whither bound its eternal destiny, are far beyond the realm of human genius to discover or explain. Marvelous, in- tangible, undefinable, life is the most absorbing and most precious possession of man. When the vital spark animates this inert body of clay, it becomes a feeling, thinking, acting person- ality. A wonderful miracle is performed. From such a union immense possibilities are born enor- mous values are created, transcending every other earthly thing. Life is life becomes vibrant, pene- trating, peerless, and, we believe, immortal. From prehistoric tMes mankind has cherished life. Every means known to primitive as well as civilized man has been employed to preserve and prolong this mystical essence we call "life." Science and art have lent their aid, but to no avail. We are sojourners only incumbents for a little while. The exact time when our earthly pilgrimage will end and the vital force be disconnected, is not known and will never be known. Death is cer- tain, but indefinite inevitable, but the time of its arrival unknown. To minimize the loss by death to replenish the waste by our taking off to repair the damage to home and loved ones to establish order and perpetuate values to maintain the purity and adequacy of society to safeguard the state and through the state the nation, has been the aim of the human race for many centuries. A device has been discovered it is Life Insurance which is born of life's uncertainty and calculated to supply every human need. We believe it to be one of the greatest blessings ever given to the children of men. CHAPTER I BRIEF HISTORY OF LIFE INSURANCE Life insurance is no new expedient. The cardinal principles upon which it operates have been known and employed for centuries. Crude and unscientific at first, protection in some form has been furnished dependents against the untimely death of the bread- winner, for more than 2000 years. Individual in- demnity at the expense of the many the uncertainty of human life the love of wife and children are the bases upon which the business has been reared. Since the whole community would suffer if one individual did, society should be safeguarded against penury and want. Life insurance is the only institution calculated to equalize social disturbance and financial disorder caused by death it capitalizes the value of a human life and restores its equivalent (as nearly as money can) to the commonwealth. Mankind is exposed to the inroads of death. In most cases, life's cherished plans are unfinished adequate provision has not been securely made for home and dear ones business affairs incomplete and contingent are in a tangle when the summons comes. It is the province of life insurance to protect each individual and therefore the community against such a day of need. About three hundred years before Christ, there were organized in Greece societies for the purpose of provid- ing funds to care for their members when sick and bury them when dead. These guilds or trade unions were called " Eranoi" or f 'Thiasoi." These societies 8 MASSACHUSETTS MUTUAL TEXTBOOK became very popular and furnished the first authentic instance of organized effort to insure against loss of life. The idea reached Rome and Orders known as "Collegia" were formed to confer similar benefits upon their certificate holders. The blessings of such protec- tion, meager and crude as the system was, spread rapidly over Europe, until during the Middle Ages, when civilization seemed to wane, Trade Guilds had an enormous growth. They were developed into a more satisfactory form in England and Teutonic countries, where they reached their highest development. Out of these orders, calculated to furnish small payments to the beneficiaries of workers in arts and crafts, grew the "Friendly Societies" of Great Britain, which accepted members outside of the trades and many of which were more generous than the guilds in the amounts paid. In 1699 there was formed the Society of Assurance for Widows and Orphans, and in 1706 The Amicable Society for a Perpetual Assurance Office both in Great Britain. These two societies constituted the first attempt at life insurance as we know it. Between 1699 and 1720 many life insurance schemes were exploited in England alone, but all were defective. "// may be taken as established that no plan of life insurance as we now understand it, had been contem- plated by any Company or Society, or had been considered by any legislature in Europe, prior to the year 1760." (HOLCOMBE.) The modern system of scientific, legal-reserve life insurance began in 1762 with the Equitable Assurance Society of London. This company issued policies for fixed amounts and graded the premiums according to age. BRIEF HISTORY OF LIFE INSURANCE 9 It is a fine tribute to our system of insurance that this splendid old corporation is still prosperous and insuring lives as it has done for over 150 years. It has well been called the "Parent" of "Old Line," level premium life insurance. In the United States of America, the Presbyterian Ministers Fund of Philadelphia takes priority over all the rest, having been chartered in 1759. Early in its history it simply dispensed funds, as subscribed by ministers and others, for relief of poor and distressed widows and children of Presbyterian Ministers. Needy ministers were also assisted. Later its busi- ness was established more solidly on the legal re- serve basis. This company is still writing insurance and is one of the soundest and best conducted com- panies in America. To-day a large number of reliable "Old Line" companies are engaged in the greatest business the world has ever seen. During the last sixty years there has been a process of reforming abuses, eliminating unsound companies, refining methods and plans, until to-day legal reserve companies are reliably and economically conducted supervised by wise legislation and firmly established upon a correct mathematical and scientific basis. Life insurance is destined to expand until its shield of protection shall cover the globe and its great blessing be felt by every one. CHAPTER II MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY INTRODUCTORY "Massachusetts" the "Old Bay State" first American home of our Pilgrim fathers and one of the thirteen original states has made splendid history for nearly three hundred years. It has been foremost in encouraging and fostering all institutions calculated to protect its citizens and con- serve their interests. The very name "Massachusetts" has become a synonym for security, dignity, honesty, and permanency, wherever known. The word "Mutual" in the Company's name means co-operation, correlation the interdependence of rights, privileges, functions, etc. It means that each member is working for all the rest, and all the rest are working for each individual. It means community of interests and reciprocal relations. The Massachusetts Mutual Life Insurance Com- pany is not a commercial institution, organized to make money. It has no stockholders to receive dividends or control its affairs. All of its business operations are for the benefit of all of its policyholders and their beneficiaries. Since it was organized its pre-eminent aim has been fivei old : To build a business that will never know com- pletion but will move forward continually to meet varying conditions. THE COMPANY 11 To develop all justifiable forms of life insurance and uniform service, to a notable degree. To create a personality that will be known and admired for its strength and friendliness. To arrange and co-ordinate all activities to the end of winning confidence by meriting it. To strive always to win and keep the satisfaction of every policyholder. To achieve these ends officials and field men have labored untiringly. They have extended to all those connected with the Company in any way the best possible co-operative service. Back of this service there have been honesty of purpose, intelligence in action, and enthusiasm tempered with reason. The Massachusetts Mutual has existed and prospered by virtue of this unsurpassed co-operation in all its departments of office and field. In every community any institution is rated by its representative. Each officer or solicitor who comes in contact with social or business life becomes the exponent of the corporation he represents, as far as the average patron is concerned, he is the corporation. Upon every official and field man of the Massachusetts Mutual rests a grave and far-reaching responsibility, to be discharged cheerfully, whole-heartedly. Since our great Company was granted its charter, its fair name has been preserved unsullied by any stain of wrong or evil rumor. It is not too much to say that, with advancing years bringing improved methods, increased efficiency and loftier ideals, its fair name shall be preserved inviolate it shall be characterized in the future years as it has been in the past a policyholders' company, honestly and capably managed in the interests of its many thousands of members, that 12 MASSACHUSETTS MUTUAL TEXTBOOK each may receive the best of life insurance at the lowest possible cost. HISTORICAL The Massachusetts Mutual Life Insurance Company was chartered by the Commonwealth of Massachusetts on May 15, 1851. Its charter by the state law required $100,000 capital stock before it could start business. This was raised, and dividends thereon limited to seven per cent to the stockholders. This stock was retired in 1867, from which time the Company has been purely mutual. The threefold purpose of its founders was that: All the Company's funds were trust funds and were to be scrupulously safeguarded. In all its business transactions economy of the strictest kind should obtain. Its policies should be consistently generous and fit the needs of its members and their beneficiaries. The Company commenced business in a single room on the second floor of Foot's Block at the southwest corner of Main and State Streets, Springfield, Massa- chusetts. This building was the Company's home until 1868. During that year the Company erected a four-story building of brown-stone at 413 Main Street, and moved into it the same year, occupying the second and third floors. In 1908, having outgrown this building, a substantial and dignified structure of eight stories was erected on the same corner where the Company began business fifty-seven years before. This building is solid and enduring. The interior is conveniently arranged for business, and is neither scantily nor lavishly equipped. The building will be ample for the Company's business for many years. The first policy was issued August 1, 1851. THE COMPANY 13 The following epitomized review of the Company's history up to 1917 may be of interest: 1851, May 15 Company is incorporated under the laws of the Commonwealth of Mas- sachusetts. Caleb Rice, President; E. D. Beach, Vice President; F. B. Bacon, Secretary. Aug. 1 First policy issued. 1861, Apr. 10 First Massachusetts non-forfeiture law goes into effect. Aug. 1 First dividend of $53,617 is paid to policyholders. 1865 Assets reach $1,000,000. 1866, Aug. 1 Second dividend of $258,450 is paid to policyholders. 1867, Sept. 9 Capital stock, $100,000, is retired. 1868 Company occupies its own new Home Office building. Begins paying annual dividends to policyholders. 1 869 James Weir Mason is elected Actuary. 1870 Secretary Bacon dies; C. McLean Knox is chosen successor. 1872 Actuary Mason resigns and Oscar B. Ireland is elected successor. 1873, Feb. 5 Home Office is burned out. Mar. 1 Caleb Rice, the first President, dies. Mar. 4 Ephraim W. Bond is elected Presi- dent; Charles McLean Knox, Vice President; Avery J. Smith, Secretary. 1881, Jan. 1 Massachusetts Act of 1880 takes effect, cash and paid-up values being thereby fixed by law. 1886 President Bond resigns and Martin V. B. Edgerly becomes President. 1887 New business reaches $10,000,000. 1 889 Assets reach $ 1 0, 000, 000. 1 89 1 Surplus reaches $ 1 , 000, 000. 14 MASSACHUSETTS MUTUAL TEXTBOOK 1892 New business reaches $20,000,000. 1895 President Edgerly dies and John A. Hall is elected President; Henry S. Lee, Vice President; Henry M. Phillips, Secretary. 1896 Death Claims reach $1,000,000. 1898 Total income reaches $5,000,000. 1901, Jan. 1 Massachusetts Act of 1900 goes into effect, and Company goes on to American 3^ per cent basis for premiums and values. 1907, Oct. 1 Company adopts American 3 per cent basis for premiums and values. 1908 Assets reach $50,000,000. Sept. 3 Death of President Hall. Oct. 9 Company moves into new Home Office building. Oct. 28 William W. McClench is chosen Pres- ident; William H. Sargeant, Vice President; Wheeler H. Hall, Secre- tary. Total income reaches $10,000,000. 1909 New Business reaches $30,000,000, paid-for basis. 1911 Assets reach $60,000,000. Sixtieth Anniversary. 1915 New business reaches $45,000,000 delivered. 1916 New business paid for, $57,125,676. Admitted assets, $93,240,377. Insurance in force, $410,166,020. Since 1886 each year's apportionment of surplus for dividend payments has exceeded that of the year pre- vious. CHARACTER By "character" is meant the essential qualities or principles exemplified. The Massachusetts Mutual has always possessed those intrinsic features which one THE COMPANY 15 expects to find in a corporation entrusted with fiduciary funds. Promptness, courtesy, honesty, economy, and other commendable characteristics, have marked its career. It has always been a full legal reserve or so-called "Old Line" company. Simply stated, this means that it must at all times have enough funds available to pay all claims as they become due. It has never issued any other kinds of insurance than Life and Endowment. All its assets and surplus belong to all its policyholders. Its business record is unimpeachable, and its standing throughout the country the finest and highest. Among the other excellent qualities the Massa- chusetts Mutual Life Insurance Company possesses, but which we shall not take time to elaborate, the follow- ing might be mentioned: It has the wisdom of age and the vigor of youth. Has a nation-wide reputation for honoring its obligations. Entirely free from objectionable features. Its general agents and solicitors are men of good moral character and possessed of a high degree of intelligence. Policyholders are very carefully selected. Not a dollar of foreign securities among its assets. No business solicited outside United States. Benefits and privileges contained in recent policies 16 MASSACHUSETTS MUTUAL TEXTBOOK have been conferred upon old policyholders so far as possible. Every dollar of its assets is of the very best character and highest quality. OFFICIALS The control of the Company's affairs is vested in a Board of Directors twenty in number term of office four years. Directors are chosen by the policy- holders at the Annual Meeting of the Company, held the third Wednesday in January of each year. No policyholder can vote by proxy more than twenty votes. No officer shall himself or by another, ask for, receive, procure to be obtained, or use a proxy to vote. The Directors and Officials in charge of the Com- pany's affairs have been men of great executive ability and sterling integrity actuated by the worthiest motives and determined to conserve and preserve the vested interests of the members. During its entire history not one word of censorious criticism has ever been offered by Insurance Commissioners or others in authority for any official act. The Directors choose the following officers: Presi- dent, Vice Presidents, Secretary, Assistant Secretaries, Actuary, Assistant Actuary, Medical Directors and Assistant Medical Director, Superintendent of Agents, Counsel, Assistant Counsel, Superintendent of Loans, and such other officers and assistants as are needed. DUTIES OF OFFICERS President. The President is the chief executive of the Company. He has authority over all the depart- ments of work, in Home Office and Field. He is the responsible head of the Company in the eyes of the law. To him more than to any other official, policy- THE COMPANY 17 holders and their beneficiaries look for the safeguarding of their funds and the protection of their homes and other sacred interests. He presides at all meetings of the Board of Directors. He is ex officio a member of the Finance Committee and of all other Committees. Upon him more than upon any one else rests the great responsibility of watching the Company's assets investing funds constantly coming in and re-invest- ing the proceeds of maturing securities. As the chief executive of a great institution, his varied duties impose a sacred trust, which must be intelligently, honestly, and faithfully administered. The Vice Presidents are his assistants. In case of his death, the First Vice President would act in his stead, until the Board of Directors choose his suc- cessor. Secretary. The Secretary is the Company's official correspondent and recorder. He corresponds with General Agents, cares for the many wants of policy- holders, and discharges many other duties incident to his office. Actuary. The Actuary has charge of the mathe- matical branch of the business. He figures premium rates, dividends, reserves, installments, etc. He must be skilled in calculation of interest, averages, proba- bilities, etc., in order to meet the special demands of a Company having so many and such varied re- quirements. Medical Director. The Medical Director is the official who examines all applications, reports, and records, in order to determine the desirability of the risks submitted by the field men. Any physical, mental, or moral impairment must be detected if unnecessary losses are to be prevented. To this end 18 MASSACHUSETTS MUTUAL TEXTBOOK great care is exercised. The Director is in constant touch with the hundreds of examiners employed, and is advising them how to do their work, so as to meet the Company's wishes. Counsel. The Company's Attorney at Law has the legality of all matters connected with the Company's operations to determine. He must know the insurance law in every state where the Company does business. He must examine abstracts of titles where real estate loans are made, must frame all unusual benefits or changes in policy contracts in keeping with state regulations, must defend the Company when neces- sary, or bring suit to secure its rights, if required, must devise agent's contracts in equity, etc. His office and work are most important, requiring hard study and intelligent service. Superintendent of Agents. The Superintendent of Agents is in charge of the Company's Field Force. Among the duties imposed upon this official, the following are most important: General supervision of all agencies. Assisting the General Agent to organize his field. Opening up new fields. Installing new agents. Instructing, assisting, directing, inspiring all field workers. The volume of new business in a large measure depends upon the way this official performs his work. Superintendent of Loans. The Superintendent of Loans has the general oversight of the securing of applications for mortgage loans. Through frequent THE COMPANY 19 visits to the cities where the Company places loans, he becomes familiar with local conditions and with the properties upon which the Company has made loans. Under his direction, and subject to the requirements of the legal department of the Company, all papers in connection with such loans are prepared and abstracts of title are examined at the Home Office. Committees. The Directors also choose from their number a Finance Committee, which looks after the investment of the Company's funds; a Loss Com- mittee, which passes on death claims; and an Agency Committee, which supervises agency matters. INVESTMENTS The Massachusetts Mutual Life Insurance Company invests its assets in three ways: first, in bonds of the United States Government or of any state, rail- roads, municipalities, and counties ; second, in mortgage loans on real estate; third, loans to policyholders on policies. Bonds. With reference to the investment in bonds, our Finance Committee must comply with the statutes of Massachusetts, as to the character of the bonds selected. A careful examination of the list of bonds owned by the Company and published in its annual report attests the painstaking and wise judg- ment used by its officials to protect the policyholders' money. Mortgage Loans. In loaning money on real estate for more than sixty-five years, the Company has found it desirable to adopt certain methods and precautions that could in nowise be objectionable to the borrower or entail a loss to the Company. It is imperative when investing trust funds that good security should be selected. The Company has been exceedingly careful in choosing desirable fields in which to loan, 20 MASSACHUSETTS MUTUAL TEXTBOOK and in later years has confined its loans on real estate to a number of the larger cities of the country. In these cities the centrally located business property gives the Company the best proportion of values, and is less liable to depreciation. Before a mortgage loan can be made by our Company, each member of the Finance Committee authorizing such a loan is required by the State of Massachusetts to certify as to the fair market value of the security, and such certificates must be recorded on the books of the Company. There are certain states in which the Company does not loan, because of legal restrictions and other objections. The Company should be very conservative, and exercise great caution, because it is loaning fiduciary funds. So, in considering loans on real estate the Company must have the benefit of all doubts. All property upon which the Company has mortgage loans is frequently examined as to its physical condi- tion. All buildings on such property must be covered by fire insurance, and the policies assigned and delivered to the Company. The result of our Company's opera- tions during its history has been such that the funds entrusted to it have yielded a good income on the investment. Policy Loans. Loans upon policies are made to pay premiums thereon when the insured finds it difficult to meet same, provided such policies have sufficient value. These are called "premium loans." Cash loans are also made upon the policies as collateral, and the proper assignment of the policies to the Company. The MASSACHUSETTS MUTUAL has never encouraged loans upon policies by reducing below six per cent the rate of interest charged. Some years ago most companies charged a rate of interest lower than six per cent, and, in fact, the MASSACHUSETTS MUTUAL was one of a very small group of companies charging six per cent. The wisdom of this position has been justified in that THE COMPANY 21 now practically every company charges six per cent for policy loans. AGENCIES The Company has always confined its operations to the healthier sections of the United States. No business has ever been sought in any foreign country. In the establishment of its agencies, in the main, large commercial centers and well developed agricul- tural and industrial communities have been selected, and capable men placed in charge. Increasing agency and individual efficiency is the constant aim of the Agency Department. MEDICAL EXAMINERS The examination of the applicant is a most impor- tant factor in our business. Examiners are appointed by the Home Office, although suggestions from the field force are heartily welcomed. The Company employs only those physicians whose education is sound and whose equipment is ample for the requirements ex- acted, in order to secure first-class risks. The Com- pany does not issue sub-standard policies. CHAPTER III DEFINITIONS Life Insurance is an indemnity for loss of the product of life. Or, to simplify, purely mutual life insurance consists in binding together by a plain agreement (called a policy) a large number of persons who promise to stand by one another, so truly and well, that, if one suffers a loss, all the rest join'in making it good. In other words, if one should die, all the living members unite to care for his dependents. All forms of life insurance rest upon two scientific principles the law of average, and the protection of the individual at the expense of the many. Again : Life Insurance is a great financial enterprise carried on by life insurance companies a business, far-reaching, enormous in volume, growing at a tremendous pace. When correctly organized and intelligently and honestly managed such companies become, without exception, the safest of all financial concerns. The Massachusetts Mutual Life Insurance Company is an experienced, sound, highly developed, and very efficient corporation, chartered by the Com- monwealth of Massachusetts to provide the protec- tion furnished by life insurance. It does away with chance. It warrants the education and c'are of the children. It guarantees the things desired. It assures the comfort of wife and self in old age. DEFINITIONS 23 It makes certain the continuance of commercial enterprises. The following definitions arranged alphabetically will be found useful: Advance Premium Receipt. When an applicant for insurance pays the first premium to the agent at the time of making application, there is provided a binding receipt which the Company requires to be carefully executed and handed to the applicant for money so advanced. By virtue of this binding receipt, if the application is approved at the Home Office, and the policy is issued, protection is afforded the applicant from the date of the medical examination. These binding receipts are carefully numbered, must be accounted for, and are a valuable aid in securing cash for the first premium at the time of writing the application. Amount at Risk. The amount the Company has at risk on an individual life at any time is the difference between the face of the policy and the reserve. Assets. All the property the Company owns of every kind constitutes the assets. Assignee. The person to whom a policy is assigned is called the assignee. Assignment. When a policyholder transfers his interest in his policy to another party, the document by which the transfer is made is called an assignment. Beneficiary. The beneficiary is the person, institu- tion, or company, to whom the policy is made payable. Cash Surrender Value. After a stated number of premiums have been paid the policy owner who wishes 24 MASSACHUSETTS MUTUAL TEXTBOOK to withdraw from the Company may give up his policy and receive therefor a definite amount of cash. This is called the cash surrender value. All companies operating under the Massachusetts laws and chartered by the State of Massachusetts have minimum values fixed by law, and the values must be incorporated in all policies issued. After the ninth policy year the cash surrender value in all Massachusetts Mutual policies is the full legal reserve. Cash values continue during the life of the policy. Withdrawals are re- garded as detrimental to the interests of the remain- ing policyholders. It is to compensate for this loss that a surrender charge is made during the early years of a policy. Changes. Many changes are being made in policy contracts, payment of premiums, beneficiaries, etc. Requests for such changes must be carefully made on blanks provided by the Company, with the utmost care exercised in following the instructions of the Home Office in every detail. Much depends upon accuracy in complying with legal and official require- ments. Discounting Premiums. If the insured should desire at any time to pay premiums in advance, the Company will discount such premiums at a fixed rate of simple interest, and will provide the insured with a statement to the effect that should death occur the then present worth of any premiums not yet due by the terms of the policy will be paid in addition to the face of the policy. Dividends. The share of surplus annually paid to a policyholder has become known as a "dividend." This payment is, however, not a dividend in the com- mercial sense of the word, but simply a refund of that portion of the premium paid which has not been re- quired to carry the policy throughout the foregoing year and establish the necessary reserve. These re- DEFINITIONS 25 may be paid in cash, or applied in reduction of premiums, or left to accumulate at compound interest, or used to purchase participating paid-up additions to the sum insured. The amount of the refund, or divi- dend, will depend upon the age of the policyholder, the kind of policy, and the number of years the policy has been in force. Endowment Policy. An Endowment policy is one that is paid to the insured if living at the expiration of a fixed number of years, or to the beneficiary in case of the insured's prior death. Errors. So long as the human mind has to deal with human affairs, errors will creep into policies, and sometimes have become very embarrassing. It is ex- pected of every agent or clerk who discovers an error in any policy issued by the Company, to report same at. once, and return the policy for correction.' Not- withstanding the great pains taken by the Company to avoid these errors, they will occasionally happen, and in this matter the Company appreciates the hearty co-operation of all its field force. Expectancy. The average after-lifetime of a number of persons of a specified age according to a given table of Mortality is called their expectancy or expectation of life. Extended Insurance. Extended insurance is paid- up term insurance continuing for as many years, months, and days as the cash value at the time extended insurance is applied for will purchase. If there is no indebtedness the amount of insurance will be the same as under the original policy. Gross Premium. The gross premium is the sum of the net premium and the loading, and constitutes the figure given in your rate book, for each kind of policy at each age. 26 MASSACHUSETTS MUTUAL TEXTBOOK Incontestable. A policy is "incontestable" when it is impossible for the Company to dispute the payment thereof for any cause except non-payment of premium or for violation of its conditions relating to military or naval service in time of war. Industrial Insurance. A few companies insure children, minors, and other members of the family, under policies of very small amounts. Premiums are collected weekly from house to house. The business has grown to enormous size. Inspection. When an application for insurance is made, the Company makes a careful investigation as to the moral and financial standing of the applicant. This plan has saved the Company many losses and much trouble. Insurable Interest. An insurable interest is many times greatly misunderstood. The law says any one who might suffer some financial loss in consequence of the death of the insured may be said to have an insurable interest in that life. The law is not designed to restrict the business, but to prevent speculating on human lives. Joint Life Policy. The Company issues a policy insuring two, sometimes three lives under one contract, which is called a Joint Life policy. Such a policy may be taken by a husband and wife if there are de- pendent children. In this case the Company limits the amount of insurance. Partners are often insured to protect their business interests. A corporation may protect its investments by insuring on joint poli- cies the lives of its officers or expert employees. Lapse. A policy is said to lapse when the insured fails to pay the premium thereon within the stipulated time. Lapses are regarded as harmful to the remain- DEFINITIONS 27 ing members as well as to the one withdrawing. It is to the interest of all to continue the policy on the books until the completion of the contract. Legal Reserve. By the insurance laws of the several states every company promising a death or endowment payment of an absolute amount, and col- lecting a premium that is not subject to increase, is compelled to maintain the reserve required by the accepted table of mortality and the assumed rate of interest. Hence the term, legal reserve. Level Premium. To meet the objections to the natural premium, which increases every year, the cost of insurance has been equalized or leveled the result is the level premium. The natural premium is smaller at the age of entry, but increases each year thereafter; the level premium is somewhat larger at entry, but remains fixed through life. From the larger premium a certain portion called the reserve is accumulated and grows larger from year to year, so that the actual amount the Company has at risk grows less each year. All premiums charged by the Massachusetts Mutual are on the level premium basis. Liabilities. All that a company owes constitutes its liability. This includes the reserve, as well as due and unpaid losses or claims, and all incidental obligations. Limited Payment Life Policy. This is one upon which the premium payments are to be completed in a limited number of years, and the sum insured is payable at the death of the insured. Loading. Loading is the amount the Company adds to the net premium to provide for expenses and contingencies. When the loading has been added to the net premium, we have the rate (that is, gross premium) as given in our rate book. 28 MASSACHUSETTS MUTUAL TEXTBOOK Loan Value. Most companies state in their policies the amount of money to be loaned at stated times, using the policies as collateral security. The Massa- chusetts Mutual has loaned upon its policies for a great many years, but never at less than six per cent, principally because the Company did not wish to encourage this practice. The loan value on our policies is the same as the cash value. Maturity. In life insurance the word is usually applied to the termination of Endowment policies, by the completion of the periods for which they were written. Sometimes a policy is said to mature by death. Mortality. The premiums charged under life insurance policies provide for a certain amount of death claims. This amount is known as the expected mortality. The actual claims incurred are generally less than the amount expected, owing to great care exercised in selection of risks. If one compares the actual with the expected mortality, taking into account the policy reserve, he will determine the saving or loss from deaths. Mortality Table. The mortality table is the instrument by means of which are measured the probabilities of life and the probabilities of death. By means of such tables the insurance company is able to determine what premiums it must charge. It gives statistics on which an accurate price list can be based. The two principal tables in use in this country are the American Experience Table compiled by Sheppard Homans, and the Actuaries' or Combined Experience Table, based upon the experience of seventeen English life insurance companies ; according to the former table the last policyholder will die between the ages of 95 and 96 and according to the latter table between the ages of 99 and 100. Since December 31, 1900, the Massachusetts Mutual has computed its DEFINITIONS 29 premium rates on the basis of the American Experience Table. The premium rates for policies issued prior to 1901 were based upon the Actuaries' or Combined Experience Table. Natural Premium. A natural premium provides for the cost of insurance for one year only. This premium increases as the age of the insured increases. The natural premium is identical with the net premium for a yearly renewable term policy. Net Premium. A net premium is the amount found mathematically necessary to enable the Company to fulfill its contract. It is the rate which would be proper to charge if the business could be conducted without expense, and if the Company could be protected against a loss or depreciation in the value of its securities. Non-Forfeitable. A policy which guarantees cash surrender value, paid-up values, or extended insurance values, is called non-forfeitable from the date when such values become available. "Old Line" Company. Any corporation that writes an absolute contract, collects a. fixed level premium, and accumulates a legal reserve fixed by the law of the state under which it is incorporated, is frequently called an "Old Line' Company. Ordinary Life Policy. An Ordinary Life policy is one upon which the insured must pay the premiums during his entire life, and the sum insured is payable at his death. Paid-up Additions. Whenever the policyholder elects to use his dividend to buy paid-up insurance and have the same added to the face of the policy, such paid-up insurance is called a paid-up addition. Whatever dividend he may have at a certain age is 30 MASSACHUSETTS MUTUAL TEXTBOOK used as a single premium to buy insurance at that attained age. It often happens that as the insured grows older the amount of reversionary insurance purchased by a dividend grows less, owing to the increased cost of insurance at his advanced age, even though the actual cash dividend may be larger. Paid-up Value. The amount of paid-up insurance that the reserve, or a stated percentage thereof, used as a single premium, will buy is called the paid-up value. In the Massachusetts Mutual this paid-up policy participates in the surplus, that is, receives an annual dividend, so long as it remains in force on the Company's books. This paid-up policy, on all forms except the term plan, has an increasing cash surrender value available at any time. Policy. The written contract of insurance made with the Company is called a policy. Various forms of policies issued by the Massachusetts Mutual will be elaborated further on. Every policy is a promise to pay, and is signed by the officers of the Company. The application and medical examination are the bases upon which the policy is issued. Premium. The premium is the stated sum the insured pays to the Company for the protection given. It may be paid in equal yearly sums continuously as long as the policy remains in force, or in a limited number of yearly payments as five, ten, twenty, etc., or in a single sum called the single premium. Every premium charged by the Massachusetts Mutual is made up of three parts: First, the contribution to the legal reserve; second, the contribution to current mor- tality; third, loading for expenses or contingencies. Rebate. When an agent pays a portion of the premium to the insurant as an inducement to insure, such payment is called a rebate. Rebating is con- demned by the companies, is against the best interests DEFINITIONS 31 of those who insure, and is prohibited by the legislature in nearly all the states. Severe penalties attach to this practice. Renewable Term. A Term policy is sometimes written with the privilege of renewing it at the end of the term without re-examination, but at a highei rate, increasing with each renewal at the advanced age. The Massachusetts Mutual does not write such a renewable term policy. Renewal Premium. A premium falling due after the first year is called a renewal premium. Reserve. The reserve value of any policy is made up of the accumulations of the balance of past pre- miums not absorbed by the risk already incurred. Another definition of the reserve is as follows: the reserve upon a policy at any given time is such a sum, which together with future net premiums and interest will on the average be exactly sufficient to pay the amount of the policy when it becomes a claim. On all policies of insurance now being issued by the Massachusetts Mutual reserves are calculated on the three per cent basis, American Experience Table of Mortality. Restoration. If the insured allows his policy to lapse, or in some other way discontinues the contract, he has the privilege of reinstatement as long as any period of extended insurance has not expired not a cash surrender value been taken. Such reinstatement is subject to satisfactory evidence of insurability and may often be obtained on an unmodified health cer- tificate in lieu of the usual medical examination. Reversionary Additions. See "Paid-Up Additions." State Supervision. All the states in the Union exercise control of the operations of insurance com- 32 MASSACHUSETTS MUTUAL TEXTBOOK panics doing business within their limits. No company can do business therein without permission of the Insurance Department. The person at the head of such a branch of state government is usually called the Insurance Commissioner. He has authority to demand statements from an insurance company at any time. He can examine its books, look over its securities, license or withhold license, etc. All persons desiring to solicit insurance are required to secure a license. Surplus. All the property the Company possesses in excess of the reserve and all other liabilities is called surplus. Under the Massachusetts law, Section 77, any domestic life insurance company transacting business in that state cannot hold or accumulate a surplus in excess of twelve per cent of its reserve this to avoid any undue accumulation of surplus. It is very essential that all life insurance companies have on hand something more than the exact amount required to carry out their contracts. They must provide for possible shrinkage or depreciation of securities. A company which has a low death rate, earns a fair rate of interest on its assets, and is economically managed will usually accumulate surplus, even more than is necessary to safeguard its contracts. In such an event a portion of the amount is set aside to be returned to the policyholders. In the Massa- chusetts Mutual the distribution of this surplus is made every year. In order to apportion the surplus, the actuary of the life insurance company must consider three things: First, he saving in actual mor'ality over the expected death loss. Second, the saving by actual expenses being less than the loading. Third, the interest earned on the invested assets. When the amount of surplus is determined, each policyholder is credited with a divi- dend in proportion to his contribution thereto. Such DEFINITIONS 33 a method of distributing surplus is called the "Contri- bution Plan." The following is a concrete illustration of one method of determining a dividend on an indi- vidual policy: Policy on B's life for SI, 000, fifth policy year, for example, if the death loss the preceding year was but 70% of the expected mortality by the table, 30% of the cost of insurance under B's policy would be credited to him; if interest earned upon the reserve during the same period was 5% instead of 3% as re- quired, 2% upon the reserve under his policy would also be credited B ; if the expenses for the same period were only 85% of the loading, 15% of the loading on B's premium would likewise be credited to him. The sum of these three items constitutes the dividend B would receive. The Massachusetts Mutual Life In- surance Company employs a similar system. The Company always holds a part of its surplus to protect its policyholders at large. Taxes. Each state in which the Company does business imposes a tax usually upon the premiums received from policyholders who are residents of such state. Temporary Term Insurance. Such term insurance is devised to fix the payment of the annual premium at a time convenient to the insured. This plan is calculated to furnish term insurance for a portion of the first year up to the date when the regular premium comes due. Our Company requires that the first regr ular premium be paid along with this temporary charge. Term Policy. A Term policy is one payable only at death within a specified time. If death does not occur within such time, the policy expires absolutely at the end of the period. Rates are low, policy has no cash or paid-up values (of any account), and returns of surplus are relatively small. All Term policies issued by the Massachusetts Mutual Life 34 MASSACHUSETTS MUTUAL TEXTBOOK Insurance Company contain a provision for a change of plan within a specified time without medical examina- tion. Trustee. Sometimes the insured, instead of naming in the policy the person or object he wishes as bene- ficiary, prefers to have the money paid to a trustee. THREE KINDS OF LIFE INSURANCE The following itemized statements about the three different systems emphasize the principal features of each without any attempt to be exhaustive or to analyze each one completely. THE ASSESSMENT SYSTEM 1. Premiums. Ordinarily called assessments are required to be paid after the death of one or more members or once a month or once every two, three, or four months, the number or amount being determined by the number of deaths. 2. Contract. Between the society and the member is called a certificate. It does not generally promise a definite sum to be paid the beneficiary as no provision is made in advance to do so. 3. Rate of Assessments. Some claim a fixed rate but do not fix the number others try to fix the num- ber but not the rate. Assessments become very large as the average age increases. No reserve. In times past these societies have endeavored to grade rates, set aside a mortuary fund to provide for excessive losses, accumulate a so-called "Reserve Fund," etc., but in very few cases have they been able to keep the rates down. Many members leave when assessments grow larger. DEFINITIONS 35 4. Beneficiary. Must take the pro rata share of assessment collected, and often has no redress if less than the face of the certificate is paid. 5. Liability. The insured is liable for unlimited assessments. He may be uninsurable when forced to apply elsewhere if the society goes into a receiver's hands. 6. Fraternities. This means, secret benevolent societies, whose chief purpose is to provide life insur- ance on the assessment plan. Their plan is cheaper than that of other assessment companies, because with the lodge system the expense of securing mem- bers and collecting assessments is generally less. Members are more persistent in their payments because of their loyalty to their lodge obligations. No insurance organization can survive unless it pro- vides for deaths that come soon as well as those that come later on as shown by mortality tables. THE NATURAL PREMIUM SYSTEM 1 . Premium must be paid in advance. 2. The contract between the company and the insured is called a policy. 3. The policy guarantees a definite sum to be paid the beneficiary. 4. The insurance is for one year only, or fractional part thereof, but can be renewed each year, while in force. 5. The premium is a progressive one gets larger each successive year. It is based on estimated mortality, interest, and expenses. 6. The company must have on hand from the beginning to the end of each policy year the reserve 36 MASSACHUSETTS MUTUAL TEXTBOOK provided by law. The best authorities say this reserve at the beginning of each year is the net premium at the then age. At the end of the year no reserve is required. If the mortality has been less than called for by the mortality tables, the balance of the fund is carried to the surplus. 7. The objections to this system increasing premiums no cash or paid-up values or extended insurance. The system is nearly obsolete, and practi- cally only used by some few companies as applying to a yearly renewable term policy. THE LEVEL PREMIUM SYSTEM. "OLD LINE" 1. Premium must be paid in advance. 2. Contract of insurance is called a policy. 3. Policy designates a definite sum to be paid beneficiary. 4. The premium is the same from year to year, level, unless reduced by dividends. 5. Policyh older is insured for face of the policy company has at risk face of policy less the reserve. 6. Premiums must be computed on basis of future mortality, interest earnings on reserve, and expenses. 7. Company must keep on hand the accumulated reserves provided by law, invested safely in securities earning a rate of interest not less than that assumed when premium rates are made. 8. Advantages of this plan : Policy contains cash value, paid-up value, loan value, extended insurance, and except where definitely made "non -participating" shares in the surplus of the company. Policy contract is definite and absolute. DEFINITIONS 37 LEVEL PREMIUM INSURANCE STOCK AND MUTUAL Under this heading we will consider briefly the difference between two forms of Level Premium Insurance Stock and Mutual. STOCK COMPANY A stock company is one controlled by the stock- holders, who own the capital stock. All profits, surplus, or gains belong to the stockholders, although some stock companies are limited by law as to the dividends they may pay their stockholders. In a pure stock company policyholders receive no dividends, but the net cost of insurance at the beginning is usually lower than on the mutual plan. Some stock com- panies write participating policies, which share in the surplus funds realized by the company. Such companies are called "Mixed" companies. In some of these mixed companies, policyholders are allowed to vote and hold office. Many leading companies which have been listed as mixed companies are retiring their stock, so as to conduct all their future business on a purely mutual basis. MUTUAL COMPANY A mutual company is one which is managed exclusively by its members. Every policyholder may vote at any meeting, may be elected and hold office, and shares in all profits arising from the business. Pre- miums are usually higher at the start than with stock companies, but the dividends declared soon bring the cost down to or below the stock rate. The mutual com- pany is managed by a Board of Directors elected by the policyholders. No member of a mutual life insur- ance company can be held personally liable for the debts or obligations of the corporation. CHAPTER IV MASSACHUSETTS' GREAT RECORD The great State of Massachusetts is the cradle of life insurance in America. Within its borders the business has been constructed and developed into the fullness of strength and usefulness. No legal reserve company chartered by this Commonwealth has failed. This is considered a most remarkable record, deserving the highest praise. We, who represent a leading company of the "Old Bay State," may well be proud of such a history. Insurance written by the strong group of excellent companies incorporated in Massachusetts enjoys an enviable reputation, and because it is associated with the best practices of the business the name of this the greatest of New England States has become a household word throughout the land. ELIZUR WRIGHT Great reforms are usually the product of an able mind and an honest heart. Some one personality moved by a worthy impulse starts out to right the wrongs and correct abuses prevailing in some field of business activity or social life. If the person has strength of character, possesses a high degree of scholarship, with the courage of his convictions, he will leave a record the historian cannot ignore. Such a man was Elizur Wright. The State of Connecticut was honored with his birth in 1804. He was graduated from Yale at an early age. Shortly after his gradua- tion he became interested in the slavery problem and wrote many articles in favor of Abolition. A little MASSACHUSETTS' GREAT RECORD 39 later he was appointed professor of mathematics in Western Reserve University. Removing to Massa- chusetts he became greatly interested in all phases of insurance. Largely through his efforts the Insurance Depart- ment of Massachusetts was inaugurated in 1855. He was made the first Commissioner. By his great genius and intense earnestness, backed up by a dignified and sterling character, he made the office powerful and far-reaching; even to this day the ' Massachusetts Insurance Department has tre- mendous prestige throughout the whole country. He went before the legislature and presented his views so logically and forcibly that he secured passage of several most important bills. These laws have proven a lasting bulwark to the cause of honest life insur- ance. Elizur Wright stood for the following scientific and economic principles: Net -valuation laws. Non-forfeiture provisions. The use of scientific tables of mortality and interest. Minimizing expense in conducting the business. Upon so solid a foundation the present Massa- chusetts Law has been built. It is to-day regarded as a praiseworthy pattern for all the different states. Unquestionably this is due to Elizur Wright, who discharged the duties of his office with such mathe- matical skill and laudable integrity that no position he ever assumed, looking to a safe and creditable conduct of the business, has ever been found to be defective. The fact that nearly all the states to-day have adopted laws emphasizing the four basic principles for which 40 MASSACHUSETTS MUTUAL TEXTBOOK he strove, justifies the honor accorded him as the Prince of Commissioners. This space has been devoted to this wonderful man because to him more than to any other we owe the sound and just laws which regulate our domestic companies. CHAPTER V DIGEST OF LAWS PASSED BY THE STATE OF MASSACHUSETTS PERTAINING TO LIFE INSURANCE Under this heading it would be impracticable, if not impossible, to itemize all of the important provisions of the Massachusetts laws which have been passed by the Commonwealth of Massachusetts since 1855. Therefore your attention will be confined or called only to those features of the law which particularly affect the policy contract,, the general rights of policy- holders thereunder, and the measures taken to safeguard companies from mismanagement. For many years it was asserted with entire truth that the insurance laws of Massachusetts were better than those of any other state. At the present time a claim for that credit can hardly be substantiated, as equally desirable laws exist elsewhere. Many of them, however, owe their origin to the statutes of Massachusetts. Our solicitors can truthfully state that our insurance legislation is equal to any, and superior to much that is in force in other states. A PIONEER It should be borne in mind that Massachusetts was the pioneer in constructive and remedial legislation, looking to the supervision of insurance companies and the establishment and protection of the rights of policyholders. The first Insurance Department pro- viding for the control of the insurance business on a somewhat scientific basis, was established in 1855. This Department, comprehensive in its duties and 42 MASSACHUSETTS MUTUAL TEXTBOOK efficient in its conduct, has not been excelled by the Department of any other state. IMPORTANT PRINCIPLES The most important principles upon which modern life insurance rests, both in this country and abroad, embodied in the statute laws of Massachusetts through the efforts of Elizur Wright, are as follows.: first, the insurance companies should establish and maintain sufficient legal reserves to enable them to fulfill their contracts; second, the policy should have a surrender value in case of lapse; third, the policy should, unless non-participating, share in surplus annually. It was not until years after these basic ideas had taken root in Massachusetts that they were generally adopted in other states. ACTS OF 1858 AND 1861 In 1858 a law was passed under which life insurance companies were required to maintain a legal reserve. While under this Act solvency of the insurance com- panies was established, it failed to recognize and protect the just and equitable rights of policyholders to a vested interest in the reserve in the event of the lapse of their policies. In 1861 Wright secured the passage of the Act known as the Massachusetts Non- forfeiture Law of 1861. This was the first statute creating a surrender value for lapsed policies, and forms the basis of the present so-called non-forfeiture laws now in force in Massachusetts and throughout the country. It provided in substance that no policy of life insurance thereafter issued should become wholly forfeited or void with the non-payment of a premium, but that a portion of the reserve thereunder, ascertained in accordance with the Act, should be applied as a net single premium to the purchase of extended term in- surance for the face of the policy, according to the age of the insured at the time of the lapse. DIGEST OF MASSACHUSETTS LAWS 43 Since the passage of this Act the law in Massachu- setts relative to surrender values and non-forfeiture benefits has been developed by a number of statutes passed from time to time. It is perhaps only necessary to point out the most important features of these laws, as the changes in minor details are now unimportant in this connection. ACT OF 1880 The Act of 1880, Chapter 232, affecting all policies issued on and after January 1, 1881, provided that after two full annual premiums should have been paid, upon default in the payment of any subsequent premium the policy should become binding on the company for an amount of paid-up insurance which its then net value would purchase as a net single premium for life insurance maturing in the same manner and at the same time as the original policy, and prescribing the rule for as- certaining such net value. The Statute also provided that after the insurable interest in the life insured had terminated, such net value should be a surrender value payable in cash to the insured, and further provided that such insurable interest should be deemed to have terminated when the insured had no minor or dependent child, and his wife, if any, and any living beneficiary named in the policy, should join in the application for its surrender. ACT OF 1887 The Act of 1880 was amended by the Act of 1887, Chapter 214, Section 76, so that the holder of a policy which had become paid-up after the payment of two full annual premiums, became entitled on any sub- sequent anniversary of the policy to surrender the same to the company, with the written assent of the person to whom it was made payable, for its net value payable in cash, thus making the cash surrender value available to the insured whether or not the insurable interest in his life had terminated under the rule of the Statute of 1880. 44 MASSACHUSETTS MUTUAL TEXTBOOK ACT OF 1894 The law was further amended by the Act of 1894, Chapter 522, Section 76, so that cash surrender values should apply to policies which had become paid-up in accordance with their terms as well as to policies which had become paid-up in consequence of default in premium payments. ACTS OF 1896 AND 1900 In 1896 a minor amendment as to the amount of the surrender charge in case of Endowment policies was made, otherwise the law remained unchanged until 1900, when, by Section 3, Chapter 363, of the Acts of that year, it was further amended so that the payment of three full annual premiums was required before the policy became non-forfeitable, and by the inclusion of the following provision, "But any company may contract with its policyholders to furnish, in lieu of the paid-up insurance provided for in this section, any other form of life insurance lawful in this Commonwealth of not less value." Under this provision companies were enabled to give extended insurance in lieu of paid-up insurance, if so desired by the policyholder, extended insurance not having been legally permissible under any policies issued since the law of 1880 went into effect. ARMSTRONG INVESTIGATION Following the investigation of the so-called Arm- strong Committee of the New York Legislature in 1906, when the attention of all legislative bodies had been directed to the regulation of the insurance business, the Legislature of Massachusetts authorized a Joint Special Committee on Insurance to revise and arrange the laws of the State relative to insurance. This joint legislative committee was not appointed for the purpose of investigating Massachusetts com- DIGEST OF MASSACHUSETTS LAWS 45 panics, but to thoroughly consider the revision of the Insurance Laws of the State, which had received no general or thorough revision for nearly twenty years. No criticism was made of any Massachusetts company as a result of the Armstrong Investigation, and the Massachusetts Mutual Life Insurance Com- pany was referred to in the Report of the Committee as a company that procured its new members on an economical basis. ACT OF 1907 Based upon the findings of the Massachusetts Legislative Committee, Chapter 576 of the Acts of 1907 was passed which went into effect July 28, 1907. Under this Act changes were made in the Insurance Laws, and new features were introduced. It was provided, among other things, that all policies issued in the State of Massachusetts should contain the provision, with which we are now familiar, as to a grace period of thirty-one days in the payment of premiums, incontestability after two years, annual divi- dends, options in case of default, right to loans upon the sole security of the policy, reinstatement within three years from date of default, and others not less noteworthy. Perhaps the most important of these provisions were' (a) Non-forfeiture benefits: That the insured should be entitled, in case of default after the payment of three full annual premiums, to elect to take either the cash surrender value of the policy, a paid-up policy, or extended term insurance for the face of the policy (Section 80) ; the Massa- chusetts Mutual contract however gives these values after two years' premiums have been paid. (b) Policy loans : That the insured should have the right to policy loans from the company upon the sole security of the policy in a sum not less 46 MASSACHUSETTS MUTUAL TEXTBOOK than ninety-five per cent of the cash value of the policy and all dividend additions thereto (Section 78). (c) Annual dividends: That companies other than those that issue only non-participating policies should make distribution of their surplus to policyholders upon the contribution to surplus plan, annually, beginning not later than the end of the third policy year, and that such distribution, or dividends so-called, should either be paid in cash, applied in reduction of premiums, or used to pur- chase paid-up additions, or shoidd be left with the company to accumulate, withdrawable in cash by the insured, as might be elected by the insured in accord- ance with the terms of the policy (Section 76). While this statute has been amended several times in certain particulars, all the substantial rights thereby conferred are embodied in the present statutes and in our current policy forms many features of which are even more liberal than the legal requirements. ANNUAL DIVIDENDS From the year 1854 down to the year 1900 the laws governing the distribution of the surplus of insurance companies to their policyholders permitted such distributions to be made annually or once in every two, three, four, or five years, as might be determined by the directors. In 1900 the law was so amended that companies might make to policyholders "from time to time" distributions of surplus not inconsistent with the terms of the policies. By the above mentioned Act of 1907, however, as has been stated, the annual distribution of surplus was made obligatory upon all companies (other than those issuing only non-partici- pating policies) doing business in Massachusetts. DIGEST OF MASSACHUSETTS LAWS 47 From the beginning of the practice of valuation of policies to the end of the year 1900, the Actuaries' or Combined Experience Table of Mortality and four per cent interest was the sole standard of . valuation in Massachusetts. Under the present law of Massachusetts, the minimum standard of valuation for policies issued since 1900 is the American Experience Table of Mortality and three and one-half per cent interest, but companies are allowed to value, if they desire, on the basis of the American Experience Table and three per cent interest. For policies issued prior to 1901 the standard is still the Actuaries' Table and four per cent interest. All Massachusetts Mutual policies issued since October 1, 1907, are valued according to the American Experience Table of Mortality and 3% interest. INVESTMENT OF ASSETS By the statutes of Massachusetts it is provided that three-fourths of the reserve of domestic mutual life insurance companies shall be invested in certain specified ways. These include, among other things, mortgages upon real estate, which shall be a first lien upon the property covered and shall not exceed sixty per cent of the fair market value of the property at the time of the loan. The statute further requires that in connection with mortgage loans every member of the finance committee who approves an application for a loan shall sign a certificate as to the value of the property covered by the mortgage, which certificate is made a matter of record for the company. The statute further authorizes investments in public funds of the United States or any state or any city of the 48 MASSACHUSETTS MUTUAL TEXTBOOK United States, in certain bonds or notes of counties, cities or towns or school or water districts, and also in certain specified bonds or notes of steam railroads and street railroads. In addition to these classes of investments, it is provided that such companies may invest in such real estate as shall be necessary for the transaction of the company's business, in loans upon the security of its own policies, not exceeding the legal reserve on the policy, and in loans secured by collateral consisting of any of the kinds of security in which it is legal for such companies to invest.' It is further provided that the balance of the assets of the company beyond the three-fourths of the reserve, which balance would, of course, include the remaining one-fourth of the reserve and the surplus funds of the company, may be invested in any manner that the directors may determine, with the prohibition against investments in certain specified ways named in the statute which it is not necessary to enumerate here. PECULIAR BENEFITS FIXED BY MASSACHUSETTS LAW Under the provisions of Section 73 of the Insurance Law of Massachusetts, it is provided that the proceeds of any policy of insurance in favor of a person, other than the person insured, having an insurable interest in the life insured, shall be free from the claims of creditors and representatives of such insured, excepting, however, as to the amount of premiums paid for such insurance in fraud of creditors with the interest thereon, and that policies payable to, or for the benefit of, a married woman, or subsequently assigned, transferred, or in any way made payable to a married woman, or to any person in trust for her or for her benefit, whether procured by herself or by any one else, shall inure to her separate use and that of her children, subject to DIGEST OF MASSACHUSETTS LAWS 49 the foregoing provisions as to premiums paid in fraud of creditors. This latter provision is important and somewhat peculiar, as a policy thus payable to a married woman, in the absence of any second bene- ficiary, would, if she died before the insured, unless previously disposed of by her, pass to her then living children and not to her legal representative. The statute whereby a policy payable to a married woman, inured, at her death, to her children, which was first enacted in 1844, was not in force as to policies issued between May 20, 1887, and March 15, 1894. During this period, policies so payable to a married woman would, unless otherwise specified therein, become at her death a part of her general estate, instead of inuring to the benefit of her children. It may be of interest that the Supreme Judicial Court of Massachusetts, in the case of Tyler, Administratrix, vs. The Treasurer and Receiver General, decided March 6, 1917, that the proceeds of life insurance policies payable to a named beneficiary, even though the right to change the benefit has been reserved, are not subject to the Legacy and Succession Tax of this State. This question has often been asked, but it is doubtful whether it has ever been squarely decided before by a court of last resort in this country. This decision ought to have great weight in case the question is raised in other states under similar statutes. EXPENSES There is no limitation imposed by the laws of Mas- sachusetts on the expenses to be incurred in the management of life insurance companies. It may be noted, however, that all life insurance companies doing business in the State of New York must conform their methods to the requirements of the New York Statutes in this respect, whereby certain limitations of expenses are imposed, and therefore such companies 50 MASSACHUSETTS MUTUAL TEXTBOOK are on an equal footing with New York companies in this regard. ASSESSMENT COMPANIES Since July 1, 1899, it has been unlawful for any insurance policies on the assessment plan to be issued within the State of Massachusetts. MASSACHUSETTS GENERAL HOSPITAL INSURANCE COMPANY When the Massachusetts Muiual Life Insurance Company received its charter, a clause therein provided that one-third of the net profits arising from insurance on lives, made during the preceding year, should be paid to the Massachusetts General Hospital. The following is the section : Sec. 9. The said corporation shall, on the third Monday of January, in every year, pay over to the trustees of the Massachusetts General Hospital, one-third of the net profits, if any, which shall have arisen from insurance on lives, made during the preceding year. Similar or identical provisions are contained in the charters of all life insurance companies incorporated under special laws in Massachusetts prior to 1856. In that year a general law was passed subjecting all Massachusetts companies to the same obligations. These provisions are wholly inoperative as to mutual life insurance companies having no capital stock, for the reason that such companies have no "profits" upon which any payment to the Hospital could be based. On this account all general laws relative to those provisions have been repealed. While the charter of this Company has not been specifically amended in this respect, such repeals in effect constitute an amendment. By statute in Massachusetts, since DIGEST OF MASSACHUSETTS LAWS 51 1831 all acts of incorporation were granted subject to alteration, amendment, or repeal by the Legislature. Our Company and all other companies have more widely different and increased powers under the general laws relating to insurance than are granted in their charters. For example, there are several provisions in our charter relative to dividends or distribution of surplus, which are now wholly inoperative on account of the change in the general law. Therefore, when the general law, above referred to, imposing this obligation to the Hospital, was repealed in 1887, it was in effect a repeal of this provision of the Company' s charter. No payment has ever been made by the Company to the Massachusetts General Hospital, and no demand has ever been made upon the Company by the Hospital for a payment or an accounting under the terms of the original charter. The Company's guaranty capital was finally retired in 1867, and since that time there has been no possible basis upon which this provision could have been operative even if it had continued in effect. There are many more provisions of the Massa- chusetts Insurance Laws relating to the organization, control, and general conduct of the business, which, though important, are not of general interest and are not here mentioned. A copy of the law will give you any specific informa- tion desired. CHAPTER VI OUR POLICY CONTRACT A policy of life insurance in the Massachusetts Mutual Life Insurance Company very clearly explains the obligations imposed upon the Company as the party of the first part and the insured as the party of the second part. Being in the eyes of the law a contract, each party thereto must comply absolutely with the terms and conditions stipulated in the policy. A contract'is made to be kept. The Company furnishes all its agents with specimen policies and descriptive circulars. // is expected that each respresentative of the Company who attempts to sell our policies shall be thoroughly acquainted with all provisions, requirements, guaranties, and benefits contained therein. Ignorance is no excuse for failure. The better the solicitor knows his goods, the more attractive he can make their advantages. There are many perfectly wonderful combinations of options and other features of our policies that a little thorough study will reveal a little more study will make available in field work. The aim of the Home Office has always been to simplify the terms and conditions of our policies so one of ordinary intelligence could easily comprehend them. Nothing complex or abstruse is allowed space on any page. To meet changing conditions which come with advancing years, forms of policies as well as provisions and privileges therein will be modified, revised, improved the better to fit every human need. OUR POLICY CONTRACT 53 The Company has therefore thought it unwise to attempt a comprehensive analysis of our policies herein, believing it would soon be out of date and worthless. Forms of contracts are already elaborated by circulars changes will be bulletined from time to time as made. A brief description of several of the more commonly used forms will be found under a following heading. KINDS OF POLICIES The Massachusetts Mutual Life Insurance Company issues all desirable forms of Life and Endowment insurance, with flexible benefits to the insured and beneficiary. Among the standard kinds of policies on the Life plan are: Ordinary Life, Single Payment, Five Payment, Ten Payment, Fifteen Payment, Twenty Payment, Twenty-five Payment, and Thirty Payment Life. Under the Endowment might be mentioned the Single Payment, Ten, Fifteen, Twenty, Twenty-five, Thirty, Thirty-five, Forty, Forty-five, and Fifty Year Endowments ; Endowments maturing at fixed ages, and Twenty Payment Endowments maturing at fixed ages. Term Policies are issued for varying periods, usually five and ten years. Joint policies on two lives are issued on the Ordinary Life, Twenty Payment Life, Twenty Year Endowment, etc. See Instruction Manual and Rate Book for particulars. Installment options are placed upon all policies except those issued on the continuous income plan. The continuous monthly income feature may be applied to all Life and Endowment policies. COMMONLY USED FORMS IN BRIEF ORDINARY LIFE POLICY An Ordinary Life policy is one which covers an insurance for the entire term of life. The premiums 54 are payable during the entire life of the policyholder. The policy shares in the surplus, has cash, paid-up, extended term insurance, loan, and other values. It also contains various options granted by the Company and the Total Disability clause if desired. If the insured lives to the age of 96, the Company will pay the face of the policy in full as an endowment. TWENTY PAYMENT LIFE POLICY The Twenty Payment Life policy is one which covers an insurance for the entire term of life but requires only twenty annual payments. It contains all the features found in the Ordinary Life policy and, in addition, the Endowment option. TWENTY YEAR ENDOWMENT A Twenty Year Endowment policy is one which covers an insurance for twenty years, and its face is then payable to the insured, if living. It contains all the benefits and guarantees contained in the life policies. Endowment insurance is a combination of life insurance and savings available for a definite amount at a desired time. Proceeds of the policy will be paid in installments if desired. TEN YEAR TERM POLICY A Ten Year Term policy is one which provides in- surance for ten years only. It is somewhat like fire insurance. It expires at the end of the term without value. Disability feature not provided on any term plan. Study Book of Instructions and Circulars for detailed analysis of all forms of policies. The CARDINAL FEATURES of our present policies worthy of emphasis, and many of hem exclu- OUR POLICY CONTRACT 55 sively our own, are enumerated under the following heading : FACTS WORTH KNOWING 1. Do you know that an entire year's dividend is allowed at the end of each policy year, whether the premium then due is paid or not? 2. Do you know that the dividend can be taken in cash? 3. Or, can be used each year to reduce the premium payment? 4. Or, if desired, will buy a paid-up participating addition to the policy? 5. And if used to buy additions, do you know that these additions may be surrendered for their cash value? 6. Do you know that, if preferred, dividends can be left with the Company to accumulate at compound interest? And should the policyholder die while any dividends remain credited to his policy, all such dividends would be paid to the beneficiary in addition to the face of the policy. 7. Do you know that the whole or any part of the sum so accumulated may be at any time withdrawn in cash? 8. Do you know that, unless so withdrawn, the premium-paying period can be reduced by the use of accumulated dividends? 9. Do you know that through dividend accumula- tions a Life policy can become payable as an Endow- 56 MASSACHUSETTS MUTUAL TEXTBOOK ment, or the payment of an Endowment policy be hastened? 10. Do you know that, without action by the insured, dividend accumulations will be used, if sufficient therefor, to pay a premium that is unpaid at the end of the grace period ? 11. Do you know that there is a provision for 31 days of grace, without charge, in the payment of all premiums after the first? 12. Do you know that the policy will contain, on request of the insured,, a waiver of future premium payments if the insured, before attaining age 60, be- comes permanently and totally disabled, or loses sight of both eyes, or loses both hands or both feet, or one hand and one foot? 13. Do you know that the policy contains an agree- ment to loan? 14. Do you know that if a loan is made, it may be for the entire cash value? 15. Do you know that there is a provision for premium loans and that they can be made automatic? 16. Do you know that the policy says that the whole or any part of a loan may be repaid at any time? 17. Do you know that the policy is without re- strictions upon travel, residence, and occupation (except military and naval service see policy) ? 18. Do you know that the policy is incontestable after the first policy year except for non-payment of premium, and for violation of the military and naval provisions? OUR POLICY CONTRACT 57 19. Do you know that the policy provides for cash surrender, or automatic paid-up insurance, or auto- matic extended term insurance, in case of failure to pay a premium after two annual premiums have been paid? 20. Do you know that if no choice is made, paid- up insurance will be binding upon the Company WITHOUT ANY ACTION BY THE INSURED? 21. Do you know that if the policy lapses and becomes paid-up, application for reinstatement can be made at any time? 22. Do you know that such paid-up insurance WILL PARTICIPATE IN DIVIDENDS? 23. Do you know that it may be surrendered for its cash value? 24. Do you know that its cash value increases from year to year? 25. Do you know that extended term insurance has a cash surrender value, and participates in annual dividends if the extension period is a year or more? 26. Do you know that if extended insurance is taken and has not expired, application can be made for reinstatement of the original policy? 27. Do you know that if death occurs within the extension period, the policy is paid without premium deduction ? 28. Do you know that if the installment feature in paying the policy is offered, the applicant is given several options to choose from? 58 MASSACHUSETTS MUTUAL TEXTBOOK 29. Do you know that provision is made for annual, semi-annual, quarterly, or monthly installments? 30. Do you know that installments will be paid as long as the beneficiary lives, if desired? 31. Do you know that they may be for a definite term of years, to be chosen by the insured ? 32. Do you know that part of the policy can be paid in cash and the remainder in installments? 33. Do you know that an annual interest dividend is paid in addition to the installments? 34. Do you know that the policy contains a provi- sion for leaving the proceeds with the Company and the payment of interest thereon to the beneficiary? 35. Do you know that the policy is paid immediately on receipt of due proof of death? If you do not thoroughly know all of the above thirty-five very important features of our policies, study them until you do. PROVISION FOR WAIVER OF PREMIUM In the event of permanent total disability, and after payment of the premiums for the first policy year, and before default in the payment of any subsequent year's premium, and before attaining the age of sixty years, if the insured furnish due proof to the Company at its Home Office that he has become wholly and permanently disabled by bodily injury or disease, the Company will waive the payment of all premium payments due under his policy after the expiration of the then current policy year. Premiums so waived shall not be deducted from the sum payable under the policy. The Company may demand from OUR POLICY CONTRACT 59 time to time due proof of the continuance of such disability, and if the insured shall fail to furnish such proof, all premiums thereafter falling due must be paid according to the terms of the policy. If premiums are waived under this clause, dividend payments continue, and the cash value of the policy increases each year, exactly as if premium payments were being made, and the other benefits provided in the policy are in nowise affected. This provision may be discontinued at the option of the insured. Upon entering military or naval service in time of war, benefits under this provision will immediately cease. No waiver of premium will be attached to any policy issued at any age above fifty-five. When the insured who holds a policy taken at age below fifty-five reaches age 60, the premium, if any, will be reduced to a corresponding premium for a policy without the disability agreement. This waiver may be attached to old policies in accordance with the Company's rules. Rates to secure this waiver of premium will be found in the Rate Book. The Company will not grant this provision on any Term policy. ENDOWMENT OPTION This feature applies to all Limited Payment Life policies issued on and after January 1, 1917. By means of this option, the insured can convert a Limited Payment Life policy into an Endowment. To do so, it becomes necessary to continue payments on the Limited Payment policy after the required payments have been made for a definite number of years stated in the policy. When the required number of extra payments have been made, the Company will pay the 60 MASSACHUSETTS MUTUAL TEXTBOOK insured the face of the policy and any additional amount that may be due. See rate book. In event of death during the payment of the required extra premiums, only the face of the policy, plus any dividend accumulations or paid- up additions, will be paid. The endowment option may not be elected if any premium has been waived on account of dis- ability. The policy to be issued on the election of this option will not contain the provision for waiver of premium. The policy participates in the Company's surplus, and contains loan and surrender values larger than for corresponding years under the original policy. Example: A policyholder, age 30, takes a Fifteen Payment Life policy for $10,000, electing the Endowment Option. After paying Fifteen years, he may continue to pay a premium of like amount for a further period of ten years. At the end of that period he will receive $10,370. This does not include any dividend accumulations or paid-up additions. Should death occur during the ten years in which additional premiums were being paid, only the face of the policy plus any accumulations or additions would be paid. This option is most valuable as a talking point. CHAPTER VII ANNUITIES The Massachusetts Mutual issues three kinds of Annuities; Immediate Life, Deferred, and Joint Life and Survivor. The following analysis of these forms wiU aid : IMMEDIATE LIFE 1 . This form guarantees a payment to the annuitant as long as he (or she) is alive. 2. The premium for this income is a single cash payment due immediately. The cost of this Im- mediate Annuity depends upon the age and sex of the annuitant at the date of purchase. See rate book. 3. The Company must have evidence of age before the contract can be issued. 4. The income under this form will begin as provided in the contract. If the sum is to be paid the annuitant annually, then the first payment will be made one year from the date of issue. If semi- annually, six months from date of issue. If quarterly, three months, and if monthly, one month thereafter. 5. The last payment due the annuitant is the periodical payment immediately preceding his (or her) death. 6. This form does not participate in the surplus of the Company. 7. No cash, or loan values are granted. 62 MASSACHUSETTS MUTUAL TEXTBOOK 8. No refund in event of death. 9. A special form of application is required, but no medical examination is necessary. DEFERRED 1. A deferred annuity provides an income for the annuitant beginning at the end of a given period, or on the anniversary of the contract after attaining a stipulated age, and continuing as long thereafter as he (or she) lives. 2. Premiums are payable for the number of years the annuity is deferred, and the rate varies with the age at purchase, the sex, and the plan. There are two plans of deferred annuities, one with premiums returned in event of the death of the annuitant before attaining the end of the deferred period, the other with- out return of premiums. See pamphlet giving rates, etc. 3. On default in payment of any premium the deferred annuity will become paid-up for such pro- portion of the full amount as the number of premiums paid bears to the number required by the contract. 4. At the time when the first regular annuity payment would fall due, a cash -value is available and may be taken in place of the annuity payments. See rate book. 5. This form of annuity participates in the surplus of the Company until the first regular payment of the annuity falls due. 6. Special form of application is necessary, but no medical examination is required. ANNUITIES 63 7. A deferred annuity, upon payment of an extra premium, can be added to an Endowment policy as old age protection. JOINT LIFE AND SURVIVOR 1 . Payment of an annuity under this plan is made during the joint lifetime and to the survivor of two lives. Payments are made under the same conditions as apply to a single life annuity. 2. Premiums for such forms depend upon the age and sex of the annuitants at date of purchase. Rates can be obtained at Home Office. 3. Evidence of age of each anuitant must be furnished before contract can be issued. 4. This form does not share in the surplus of the Company. 5. This form has no loan or cash value. 6. No medical examination of either party re- quired, but a regular annuity application is required in each case. SOME BENEFITS UNDER ANNUITIES (a) It appeals to men and women of ample means who do not wish to be troubled with investments and re-investments. (>) It provides a larger income than could be obtained elsewhere with equal security. (c) It frees one from anxious care no worry in old age. (d) It enables a parent to care for child, making 64 MASSACHUSETTS MUTUAL TEXTBOOK income sure from date of issue (or otherwise) through life. (e) The deferred plan calls for less immediate outlay and so is within the reach of the average man or woman. CHAPTER VIII CONTINUOUS MONTHLY INCOME This form of policy is very popular with insurants. On the Life or the Limited plan it provides for a monthly payment by the Company beginning at the death of the insured and continuing during the entire lifetime of the beneficiary. On the Endowment plan this form provides for a monthly payment by the Company beginning at the end of the endowment period, and continuing during the life of the insured and thereafter during the life of the beneficiary named in the application, if said bene- ficiary survives the insured; or beginning at the death of the insured, if this occurs during the endow- ment period, and continuing during the life of the bene- ficiary. These policies are issued to provide for ten years certain or for twenty years certain, that is, for 120 or 240 stipulated monthly payments. Under both Life and Endowment policies on the Continuous Income plan, no payments beyond the stip- ulated payments shall be made except to an original beneficiary. Any substituted beneficiary shall partici- pate in payments only until the end of the stipulated period. Once a year the beneficiary under this Continuous Monthly Income policy will receive an interest dividend check in addition to the regular monthly payment. This form of policy takes the place of an executor relieves the beneficiary from the worry of investment the monthly payment is certain, continuous, and cannot be diverted the principal cannot be wasted or squandered by some untrustworthy administrator in every way, this form must commend itself to insurers. Talk income! CHAPTER IX INSTALLMENT OPTIONS GENERAL SUGGESTIONS Remember tha,t all policies issued by the Massa- chusetts Mutwal contain installment option privileges, except policies on the Continuous Income Plan. Talk income for wife or children to your prospect instead of life insurance. Give every case special consideration according to its needs. An Ordinary or Limited Payment Life policy with installment options can be made to fit most conditions better than the Monthly Income plan. Do not forget the interest item on deferred payments important! Keep in mind the annual interest dividend paid under Options B and C in addition to the installments. The Company will consider the payment of the proceeds of a policy in many ways not specified in the policy. Any unusual beneficial clause should be first submitted to the Company for approval. The installments cai be arranged to cover the lives of two persons and even thfe'e under Option B or D. SPECIFIC SUGGESTIONS OPTION A Under this option the beneficiary may be provided with a fixed income for a number of years or months, INSTALLMENT OPTIO.NS 67 the number depending upon the amount of income chosen and on the rate of interest credited by the Company on the annual balance of the installment fund remaining in its possession. The installment includes the full amount of interest credited no further interest payments would be made. At 3% interest $2,000 would provide $50 a month for 42 months. At 4%% interest $10,000 would provide $50 per month for thirty-one years and ten months, or $100 per month for 126 months. By changing the amount of monthly income or the duration of the income on old and new insurance, an excellent argument for increasing an individual's holdings can be made, a great variety of combinations being possible. Among the many possible benefits to be obtained under this option, only four will be mentioned. They are as follows : (a) Proceeds of the insurance payable to mother in 20 annual payments of $250 each, and balance re- maining in Company's hands as a 21st installment. (b) Proceeds of the policy paid to brother of the insured in monthly installments of $50 each as trustee for the benefit of insured's daughter. (c) Proceeds of the insurance paid in monthly installments of $40 to wife of the insured she being granted privilege of increasing the installment to an amount not in excess of $100 per month. (d) From the proceeds of the policy an initial payment of $250 to the insured's wife and from the 68 MASSACHUSETTS MUTUAL TEXTBOOK balance a monthly income of $25 to be paid wife. If she should die before the proceeds are exhausted, monthly installments are to be continued to each of the insured' s daughters equally or to the survivor, the monthly income to be reduced to $20. Option A affords a great variety of combinations for the protection of wife, children, and the insured in old age. For additional suggestions write Actuarial Department. OPTION B Under this option the beneficiary receives a definite amount for a definite period of time. Interest dividends are drawn by way of extra pay- ments at the end of each year and may be considered as a bonus. They grow less as the proceeds of the policy out of which the income is paid are reduced each year by payments to the beneficiary, as the proceeds grow less the interest earned thereon decreases. See table in Dividend Schedule furnished by the Com- pany. Five thousand, five hundred eighty dollars of insurance will give the beneficiary $100 per month for five years with a dividend each year. Twenty-three thousand nine hundred dollars of insurance will give the beneficiary $100 per month for 30 years and dividends. An initial payment of a larger amount can be provided by adding the amount of such payment to the equivalent insurance value of income desired. Ten thousand dollars of insurance will provide a monthly income for the beneficiary of $96.17 for ten years or $41.85 for 30 years. INSTALLMENT OPTIONS 69 Among the many benefits to be obtained under this option, four will be mentioned. They are as follows: (a) Proceeds of the insurance to be payable, in event of the death of the insured, to wife if living, in 240 monthly installments. (b) From proceeds of the insurance an initial payment to wife of $1,000, the balance of proceeds in 240 monthly installments of $50 each, the first monthly payment to be made on the first day of the month next succeeding the payment of $1,000. (c) The proceeds of the insurance to be payable to wife as trustee for son, in annual installments as pro- vided under Option B number of annual installments to be determined by subtracting from 21 the age of the said beneficiary at the time policy becomes a claim. If the son shall have attained the age of 21 proceeds of policy shall be paid him in one sum. (d) Proceeds of insurance to be payable in 240 monthly installments of $100 each to executors for the equal benefit of children, the share of any beneficiary dying leaving issue to be paid equally for the benefit of such issue, and if any of children decease leaving no issue, his or her share of the proceeds of this policy to revert to the equal benefit of such of the insured's children as may then be alive. Under this option there are many possible arrange- ments for protecting wife, children, grandchildren, and one's old age. Consult the Actuarial Department for further information. OPTION C Under this option, the beneficiary receives a life income as long as such beneficiary may live, with the added guarantee that in any event payments will be 70 MASSACHUSETTS MUTUAL TEXTBOOK made for a stated number of years. Complete protec- tion may be furnished the policyholder or the benefi- ciary. Interest dividends are drawn by way of extra pay- ments at the end of each year, decreasing as under Option B. $25,467 would be sufficient to provide a wife with $100 a month for life, twenty years guaranteed, if she was 35 years, old when her husband, the insured, died. $10,000 would provide $43.80 per month for life, ten years guaranteed, if completed age of beneficiary is 40. The guaranteed income payments under this option, in any event will give a substantial return on account of the policy. If the beneficiary die soon after com- mencing to receive the income, no large loss of the proceeds will result. On an Endowment policy, or by the cash surrender value of a life policy, the insured has an opportunity of securing an old age pension for himself. Thisoption can be changed to fit changing conditions without affecting the face of the policy. In this regard it has a greater practical value than the Continuous Monthly Income plan, under which there is no income option available other than that stipulated in the contract. Dividends and cash values under Option C are relatively larger than under Contiguous Monthly Income plan. Among the many benefits to be obtained under this option, we will mention three: (a) The proceeds of the insurance to be payable as provided in Option C, 20 installments stipulated, INSTALLMENT OPTIONS 71 payments to be made monthly to Jane Doe, born , wife of the insured, if living; otherwise to Mary Doe, mother of the insured, or to said mother's heirs-at-law. The right to change and to successively change the beneficial interest without the consent of the benefi- ciary is reserved to the insured. (b) The proceeds of the insurance to be payable at maturity as an endowment to the insured in annual installments, 15 guaranteed, as provided in Option C, any unpaid installments to be payable to the insured's daughters Mary and Lucy equally or to the survivor of them. In the event of the insured's death prior to the expiration of the endowment period the proceeds to be payable in similar manner to the insured's daughters Mary and Lucy equally or to the survivor. (c) Make the proceeds of the insurance payable, in the event of the insured's death, as provided in Option C, twenty-five installments stipulated, to the insured's wife Mary Doe, born - , if living, other- wise as provided in the Installment Option provisions said payments to be made monthly at the rate of $8.45 per month for each $100 of annual installments as provided herein. Option C can be modified to suit the needs of individual cases or to meet changing conditions. There are hardly any circumstances in practice where some adaptation of this option would not provide what was wanted. It is regarded by all who are familiar with its possibilities as the greatest of Options. OPTION D Under this option the proceeds of the insurance are left with the Company, and interest thereon at not less than three per cent is paid the beneficiary. The Company further contracts to pay such additional rate as the Directors may determine. 72 MASSACHUSETTS MUTUAL TEXTBOOK The Company is primarily a life insurance corpora- tion, whose chief purpose is to pay claims, but the officers believe it to be within the Company's province to see, as far as possible, that the proceeds of our policies are used to the best advantage of the beneficiaries. The Company holds the money, not as a trust fund and to be administered as such, but only with the idea that it shall be used in some more definite manner sooner or later. The Company does not wish to accumulate funds under this option. Under this option, no re-investment of the fund held by the Company is required no legal expense is necessary in collecting the income no direct invest- ment expense in the form of brokerage no deprecia- tion in the value of the proceeds and the full amount of the sum insured can be realized at any time, if proper provision is made. Upon the death of the original beneficiary, the interest income under this option can be continued to a second beneficiary, or even to a third if such was born before the death of the second beneficiary. Among the benefits to be secured under this option, three are mentioned as follows: (a) Proceeds retained by Company, interest paid monthly to insured's wife during her lifetime at her death, or should she not survive the insured, proceeds paid in 240 monthly installments as provided under Option B to insured's daughters Mary and Jane equally or to survivor. If neither daughter is alive at death of wife, proceeds are to be paid to her estate. If neither daughters nor wife are alive at his death, proceeds are to be paid to his estate INSTALLMENT OPTIONS 73 (b) Proceeds to be paid under Option D interest installments to wife during her lifetime at her death the installments to be continued to insured' s daughters Mary and Jane, equally, until they respectively attain the age of 25, at which time the share of each daughter attaining said age to be paid her in annual installments, 25 stipulated, as provided under Option C. In event of death of either or both of said daughters, prior to death of insured's wife, such deceased daughter's share to be paid in one sum to her executor for equal benefit of any surviving issue, and if there be no surviving issue, then to the executor of the deceased daughter. (c) Proceeds of the policy to be payable as provided in Option D, as follows: The income from the sum insured shall be payable in monthly installments beginning one year from the receipt of due proof of death of the insured, and shall be paid to the wife of the insured, if living when said installments fall due, otherwise to Thomas, son of the insured, if then living, otherwise to the children of the said Thomas, if any are then living, otherwise to Jane, the daughter of the insured; it being the intention that said beneficiaries shall successively receive said income during their respective lives in the order in which they are herein named. If all of such beneficiaries predecease the insured the principal sum shall be paid to the executors or administrators of the said insured. The principal advantages of Option D afforded the beneficiary are the security, good rate of interest, freedom from worry, and flexibility in the use of the proceeds of the insurance left with the Company. For more elaborate explanation of Installment Options, you are referred to papers and articles in the Radiator published in 1917. Those are both instruc- tive and exhaustive. CHAPTER X A FEW TALKING POINTS OF VALUE The following tips have been gathered from the wide experience of our best solicitors and will prove helpful to the beginner in selling our policies, he will thus have a great advantage over the one who was never told. 1 . Should the applicant pay the first premium at the time he makes application, as soon as the Com- pany approves same, he is protected from the date of the medical examination, whatever his condition of health may be when policy is delivered. A strong point to use for getting check with application. Try to get check with every application. 2. An applicant can pay a quarterly (or semi- annual) premium in advance, and when the next quarterly comes due, can pay four quarterly premiums in advance, the Company discounting these to an annual rate at the age policy was issued. If the insured continues so to pay these premiums until death or maturity, the quarterly premium paid in advance, not due by the terms of the policy, will be returned. By this process he can many times adjust the payment of his annual premium to the day and month desired retain his age and not use the preliminary term. 3. A policyholder can pay in advance as many premiums as he desires. The Company will discount these premiums so advanced at simple interest, giving A FEW TALKING POINTS OF VALUE 75 the insured an agreement that, in event of his death the then -present worth of premiums not yet due will be returned with the face of the policy. 4. Should a policyholder make a loan from the Company on his policy, no time is set for him to pay it back. The Company will accept partial payments, stopping interest upon each one as it is made. Interest on the loan is not collected in advance, unless the entire cash value is borrowed. Read the loan clause in the policy. Do -not emphasize the loan feature. Every loan made lessens the protection intended by the face of the policy. 5. One can take an Ordinary Life policy, carry it while needing protection for his family, and then under any of the options use the cash value to secure a monthly income for his old age. Strong talking point especially with large policies. 6. A proof of death consists of claimant's statement, physician's and undertaker's certificates. Very simple. No "Friend's statement" required. Emphasize this. Good plan to show proof. 7. When the accumulated surplus on an Ordinary Life policy (or any other), added to the reserve, equals the face of the policy, the Company will pay the full face of such a policy. In that case, the insured doesn't have to "die to win." All policy forms that may become endowments to the holder late in life are worthy of much study. 8. Study the change of an Ordinary Life to a Limited Payment Life. For example, after five years' premiums have been paid and dividends have been used to reduce premiums, find from the table in your rate book what one dollar would amount to at 6 per cent compound interest for five years. Then 76 MASSACHUSETTS MUTUAL TEXTBOOK multiply that amount by the difference in premiums between the two policies. This will give you the approximate amount. Then tell your prospect who is "not ready" to take a Twenty Payment Life that he can take a lower premium policy and change it over later to the kind desired no loss of time, money, or age. Fine closing argument. 9. A man wants to endow his own old age, and care for a daughter at the same time. Endowment on two lives' is the greatest thing, ever. Monthly income sure no worry- no executor nobody's business. When policy matures, he gets a check every month and an annual dividend ; and when he dies, she gets a check for the same amount every month and an annual interest dividend as long as she lives. This can be worked out in other ways. 10. When a person dies, the state (and possibly the National Government) will collect from his estate an inheritance tax. An Ordinary Life policy suffi- ciently large to cover this tax, allowing dividends to remain with the Company, makes a fine talking point. A prudent ma.n likes to provide his estate with every protection. 11. Emphasize the advantage of a Nineteen Pay- ment Life, especially if your prospect has an idea that he wants a Twenty Payment Life. But little difference in premiums, cash values larger, dividends greater, aggregate cost lower, paid-up sooner if dividends are allowed to accumulate mature as an endowment sooner if dividends are left with the Company. Great policy to talk when a competing company's Twenty Payment Life rate is no smaller. 12. The savings bank feature of all Endowment policies should be accentuated. Money deposited with the Company, same as with a bank, with the A FEW TALKING POINTS OF VALUE 77 added advantage of death benefit asset for old age Company will pay proceeds of policy in monthly installments nobody's business no fees to pay no worry about daily bread. 13. He has a mortgage (death grip) on his home. He hesitates about insuring, fearful he cannot pay the premium on either a Twenty Payment Life or an Ordinary Life. He has about all he can do to support his family and pay the taxes. Suggest a Term policy while his burdens are so very heavy. It protects his loved ones,, and sa.ves his rate. Probably within five years he can change it to a better plan. 14. Co-partnership insurance payable when partner dies, prevents hasty search for another partner vexatious intrusion by obstinate executor un- pleasant pressure of creditors forced sale to raise money to buy out dead partner's interest stoppage of credit. At such times, life insurance transforms itself into a banker to pay debts an investor to buy new goods a sales manager who is not deterred from selling the stock and everybody rejoices. Great talking point. Term policies are well calculated to protect business interests, loans at banks, unusual financial risks for short periods, etc. There are many other excellent features of our policies that will spring up in your fertile brain and bear rich fruitage as you go about your daily work. CHAPTER XI SALESMANSHIP GENERAL In the broad range of commercial activity, expert salesmanship takes precedence over all other branches. The successful salesman is admired by all. In these wonderful days, he is abroad in the land. Selling life insurance is a fine art, calling for the highest type of manhood, backed by the largest degree of efficiency. As a vocation it knows no creeds, no boundary lines, no impossibilities. Old forms of drumming and drinking to sell our goods have been thrown on the scrap heap, to make way for greatly improved, high-class professional methods. Since the essential steps in every sale, by all authori- ties, consist in enlisting attention arousing interest awakening desire obtaining decision and securing action, the life agent becomes more than a salesman of merchandise more than a mere salesman of policies. In his work he acts a varied role. He gives valuable advice acts as a friend serves as a banker, trustee, attorney, or judge for every one he solicits. The extra qualities of head and heart employed in so versatile an occupation give the business a delightful flavor peculiarly its own. Any man of average ability, by earnest work and strength of character, can secure in the life insurance business a satisfactory income and an imperishable place in the community. To engage in this work, one does not need to have money, a strong pull, or a university education; but he will need to energize his brains he will need to bring into constant actio'n SALESMANSHIP 79 all the affections of the heart not less must he preserve and conserve his health, because good health is both forceful and magnetic. His growth in power, skill, wealth, influence, and happiness will be in proportion to the degree with which he uses these faculties. Every successful salesman of policies in the Massa- chusetts Mutual Life Insurance Company may have the assurance that he can take his place in the social and economic life of the section where he lives no one should rank above him. He can assuredly feel and confidently express the dignity of the great business in which he is engaged, because of its beneficent and remedial effect upon his neighbors. He can cherish the feeling that he has diagnosed big commercial affairs and guarded them from death- destroying consequences by proper indemnity. His heart should get big when he reflects what crimes he has prevented, what poor houses he has closed, what institutions of learning he has endowed, what hospitals he has equipped, and so on. Verily the salesman of Massachusetts Mutual policies has the right to stand erect and glory in his work. PRACTICAL In a more practical presentation of life insurance salesmanship, and by way of a good foundation, let us consider briefly the policy or the article we are to sell, the customer or the one induced to buy, and the sales- man or the one who solicits the business and makes the sale. THE POLICY Massachusetts Mutual policies are clearly written easily understood generous in their terms cover every condition of human need one price to all and at a low net cost proceeds paid when due have never been repudiated, have never been conjectural or contained an element of loss to the holder up to the minute in conditions, options, and benefits, are very popular wherever known, praised by our com- 80 MASSACHUSETTS MUTUAL TEXTBOOK petitors, approved by the Insurance Departments of the various states honored by the daily press commended by thousands of beneficiaries and in all respects without a superior. Various kinds of policies issued by the Company are listed under another heading. The Massachusetts Mutual as an institution has always been devoted to the service of policyholders and beneficiaries. The purpose of its founders was to make its policy contracts fit the needs of policyholders in every "way. THE CUSTOMER Here is the material on which we work. Every person who is eligible for insurance is a possible customer. By "eligible" is meant one who is able to pay the premium, and who measures up to the Com- pany's standard of insurability, and in whose life some- body has an insurable interest. Every such customer should have some insurance, more insurance, or better insurance "beter" than the quasi insurance offered by assessment companies. No two customers are exactly alike. They differ is so many ways, it would be impossi- ble to mention them. But these various differences furnish a diversified and interesting experience much more enjoyable than otherwise. The number of cus- tomers is rapidly increasing, which is an earnest that the field will never be exhausted. Each generation offers new opportunities for the salesman with the need of pro- tection greatly emphasized. This is due to the growth in. population and wealth the widespread educational processes at work through institutions of learning, general advertising, the public press, and field work done by thousands of solicitors and the disbursement of millions of dollars in dividends, cash values, and death and endowment claims by the companies doing business. But our customers do not "come in" to SALESMANSHIP 81 buy insurance as they would groceries or clothing not as a rule. Because 1. They are careless or too engrossed in their personal affairs and so delay. 2. They hate to buy something which they think will yield a return only after they are dead. 3. They are too hard up and prefer to wait for a "more convenient season." 4. They do not fully appreciate how much they need insurance nor the danger in delay. So They must be selected, interviewed, interested, and persuaded. Work of this kind is the "beau ideal" of salesmanship and to this end each solicitor is earnestly striving. He aims to be versatile enough to handle successfully the brusque, square-jawed, deter- mined person as easily as ,he does the high-browed thinker who reasons everything out. He studies to be flexible enough to deal successfully with the lacka- daisical, devil-may-care fellow who does or does not care for protection (depends on the weather vane), and considers it not too hard to solicit the ignorant, bigoted chap who has to be educated before he is written. He must study character, environment, family, wealth, and many other customer-determining factors. Customer study is the GREATEST TOPIC in our business. How to secure prospects, methods of interviewing, how best to interest them in our policies, and ways and means of closing, will be briefly discussed under the topic of "Selling." THE SALESMAN The one who brings policy and customer together. He must know the policy he must know the customer. 82 MASSACHUSETTS MUTUAL TEXTBOOK Knowing the policy is comparatively easy but learning the customer is difficult, the most difficult of all his work. The salesman must have brains enough to keep all his senses alert must have a body well enough and strong enough to make itself felt must have a heart big enough and kind enough to convert buyers into friends. Or, in other words, he must have average ability, great endurance, a disposition to work and a good moral character. These qualities are easily trained, if the salesman only will. Under proper environments and careful cultivation their growth is rapid. There is a great variety of life insurance salesmen. We can characterize a few of them as follows: big ones, little ones faithful ones, false ones enthusiastic ones, indifferent ones up- right ones, untrustworthy ones and we might go on. Each earnest salesman can elect himself to any class he desires, in spite of outside influences. In other words, he is, in a great measure, the architect of his own future and so can build well or otherwise. Study, observation, and work, backed by a praiseworthy ambition, will make a first-class insurance man out of him. The ideals he must choose how best to inform himself on plans and methods what to see and hear as he labors approved and well-tried schedules, projects, and suggestions about field work, are referred to more in detail under "Selling." CHAPTER XII SELLING Under this heading, we will outline the actual securing of applications, dividing the subject for convenience into the following headings: I. Preparation. II. Means of Increasing Acquaintance. III. Prospects Where Found How Found. IV. Some Methods of Approach. V. Suggestions About Closing. VI. Following Up. VII. Practical Suggestions. PREPARATION TWENTY-FIVE SUGGESTIONS 1. Keep yourself clean and well dressed. The impression you make may tip the scales in your favor; besides, it increases your own self- respect. 2. Free your mind absolutely from any other business or professional cares. YOH can't do two or three things successfully at the same time. Read your contract with your General Agent keep your promises. 84 MASSACHUSETTS MUTUAL TEXTBOOK 3. Read your Book of Instructions provided by the Company and then obey orders. It is the only way to avoid asking foolish questions. It is the quickest and surest way to learn the Company's wishes. 4. Study the forms of policies and the circulars, literature, etc., published by the Company. The Ordinary Life, Twenty Payment Life, and Twenty Year Endowment policies first, then other forms as you grow more into the business. 5. The Rate Book needs a lot of attention. This book belongs to the Company it is simply loaned to you. It contains rates, values, tables, and other matter of great value to you in your field work. You can study this for many years and still find something new and helpful. It can't be exhausted. 6. As you get farther into the work, read every book and pamphlet on field work you can secure. Every suggestion from successful men or methods will enable you to sell more Massa- chusetts Mutual policies. And read them over and over again. 7. Secure a copy of the Massachusetts law relating to life insurance companies chartered by that commonwealth, and read it. You will then better understand its equitable provisions for the policyholder, and more fully realize the many safeguards which surround Massa- chusetts companies for the policy holder's protection. It is referred to elsewhere. 8. Learn a little (not too much) about other com- panies with which you may sometime have to compete. As their forms of policies, rates, and values are constantly changing, it will hardly SELLING 85 be necessary to study them in too minute detail. But, always have books at your command from which you can get up-to-date information. This is very important. 9. Be the Massachusetts Mutual's champion and safeguard its interests under every circumstance. You are an integral factor in this great corporation. Fidelity to the trust reposed in you by the Company is most assuredly expected. You have a right to be the proudest individual who carries a rate book. 10. The "party of the first part" to your contract the Manager or General Agent in charge is entitled to your loyal support. Give it to him freely, cheerfully. He will reciprocate. 11. Your relation to those you insure. Get a clear conception of what you are to them. They are to be instructed, guided, assisted, and befriended in every way. This is most im- portant. Never let go your hold on them. 12. Close your ears to the "siren songs" of those representatives of other companies who would lure you away. If you changed, some other company might induce you to make another change and so on spelling Death. No! Stay by build up your reputation. You will never be sorry. 13. Set your mind, your will* your heart, upon becoming a successful salesman of the Massachusetts Mutual's policies, if it takes you ten years to do it. Never mind ordeals, trials, losses, dis- appointments they will make you stronger, surer and success sweeter. Many have done it yew can. Be determined. 86 MASSACHUSETTS MUTUAL TEXTBOOK 14. Study continually only those methods and plans that will give you greater inspiration and make you more efficient. Inspiration and efficiency mean income and happiness. Our own Radiator and other insurance journals are full of suggestions and plans that have been successfully tried out. Try 'em yourself. Write out your own successes. Write "em over again and so on. 15. Shun drink, gambling, profanity, and anything else that would besmirch your character. As you are the exponent 1 of the Company, a debauched life could hardly be called a proper representa- tion. 16. Speak well qf your competitors. It pays to see the good in others and, if called on, to mention it. Especially say nice things about them to the man you are soliciting, should you find it necessary to mention them at all. 17. Keep your head clear, your blood in proper circulation, and your digestion perfect. Else you cannot be vigorous, buoyant, forceful, mag- netic. Guard your health with jealous care. 18. The Company's field force have an association called the "Agents' Association of the Massa- chusetts Mutual Life Insurance Company," which holds one session annually at the Home Office in Springfield. It will pay you to join the Association, attend those meetings, and take part in the proceedings. 19. // there is a Life Underwriters' Association organized near where you live, join it. Mix. Touch elbows. Exchange ideas and secure the benefits of organized co-ordinated team work. SELLING 87 20. Systematize your work by a card index or other- wise. 21. Be thorough. Take great pains with whatever you undertake. Study to do more than is expected and do it better. Study to do your work more quickly than is expected, and to keep doing business at the old stand longer. So will you become more efficient. 22. Look and work for big applications but do not pass a small one. 23. Never acknowledge defeat rather say, "He won't do it now, but I will get him yet." 24. Never misuse social, club, or_ lodge privileges. Use your acquaintance only to enlarge it. 25. Don't scatter in your work. Never skim a place a factory a wholesale house a big depart- ment store a village a city block a town- ship work each to the bottom. CHAPTER XIII MEANS OF INCREASING ACQUAINTANCE A large acquaintance is the only foundation for extensive and effective work in selling insurance. It isn't to be accomplished in a week, or a month, but rather a desired end to be worked towards a purpose. To be well acquainted is also essential. How best to meet the best persons in a community is the problem. The following suggestions may be helpful : MIX I. You must, if you wish to "get next." No hermit ever accomplished anything, anyhow, anywhere, any time. You must get into the social and business life and know men and women. Join some secret society of your liking, the Club, the Chamber of Commerce, the Guild, etc. And when you become a member, attend the meetings, social functions, meet the members and keep meeting them until you know them and a lot about them, and they know you. You will soon possess a fine stock of valuable information and a fine group of acquaintances most valuable assets. INVEST II. Buy a share or two in the local bank the creamery the manufacturing plant- or any other corporation made up of the best men in your location. Buy it, if you have to borrow the money. And then attend stockholders' meetings and so get acquainted. One of our best producers gets his best business from the stockholders in the companies where he has MEANS OF INCREASING ACQUAINTANCE 89 invested small sums. It took him several years to do this, but now he belongs to a dozen corporations and knows nearly every stockholder. Take your time but do it. TALK ABOUT SOMETHING ELSE III. Your introduction would be practically worthless if you "boned" a man for an interview the first time you met him at a social or business function. One of the best ways to win a man's respect is to talk with him about things of public or mutual interest and talk intelligently. Good manners and brains will make you a larger and better acquaintance, if properly used, than everlastingly harping on insurance whenever you meet a man. Meet him halfway on whatever may be of interest to him without boring him. The opportunity will come for you to present your proposition. Pbssibly you can tell him some- thing that will be of value to "him. Be on the look- out. Big business is frequently secured this way. INTRODUCTION BY POLICYHOLDER OR EXAMINER IV. This is a valuable method of enlarging your circle of acquaintances. This is not to be done wholesale- but a little at a time whenever op- portunity offers. Men whom you have insured right will help you to get acquainted with other good men. Much depends upon how you do your work, if you expect cooperation. You won't insure all you meet, but properly introduced, each one will pass you on to his friend, who may prove to be a prospect, PROMISCUOUS CANVASSING V. Among those nearest you wherever you feel inclined to go. By this method you will need to make your business known when you enter his 90 MASSACHUSETTS MUTUAL TEXTBOOK office, shop, or home. A straight canvass, while not yielding such large results as some other methods, will open up a vast field of possible acquaintance and among good men, if you choose to seek them and are able to secure an interview with them. This method of getting acquainted is arduous and sub- jected to many disappointments. It is not the best. CHAPTER XIV PROSPECTS WHERE FOUND HOW FOUND In considering this subject, let us first define a -prospect. To a man who writes $50,000 of new business per annum, a "prospect" is a person with whom he has had two or more interviews and who seems interested. To the one who writes $250,000 per annum a "prospect" is any one who will give him a respectful hearing. To the one who writes $1,000,000 or more per annum a "prospect" for insurance is a person who can pass the regular medical examination, can pay the required premium, who hasn't air the insurance he ought to carry, and in whose life some one or something has an insurable interest. Salesmanship transforms such a one into an applicant. Now, among what classes of individuals will you be most likely to find the best prospects and how will you proceed to do so? THE MOST LIKELY CLASSES I. (a) Young men and maidens from fifteen to twenty years of age through their parents. Brief reasons: to get early start, low cost, while in good health, if Endowment is taken it matures early, Limited Life policies paid-up while insured is still young, in case of early, untimely death, parents reimbursed for money spent in education, training, care, etc. A wonderful field and worthy the most careful cultivation. (b) Women. Widows with dependent children, wives whose husbands are uninsurable, single women 92 MASSACHUSETTS MUTUAL TEXTBOOK who hold remunerative positions like stenographers, clerks, saleswomen, school-teachers, artists, doctors, nurses, lawyers, women of wealth or in business with large responsibilities, etc. Brief reasons: care for old age, protect a loved one, secure an investment, save money, safeguard estate or business, etc. With a large and increasing number of women who are wage earners or in business for themselves, the scope of possibilities among this class is unlimited. Some of the best solicitors the life companies have are women themselves. They have added tone and character to the business. (c) Young Men Starting for Themselves. Those graduating from college or soon to graduate, just going into business, entering religious work, com- mencing practice of law or medicine, etc. College men in groups or classes for benefit of college, or fraternity, members of religious bodies in groups to secure a mortgage, etc. Brief reasons: forces saving and stimulates thrift and economy, best form of collateral, policy well under way when he marries, rates low, increases his self-respect, fully paid- up in his prime, etc. Opportunity for business among these classes of young men is tremendous. (d) Business and Professional Men. Merchants, manufacturers, bankers, lawyers, physicians, finan- ciers, capitalists, big men of every calling every- where. Such men are frequently easiest to handle and very satisfactory persons with whom to do bushiess. Our best salesmen, who place a half million or more a year, work chiefly among this class. Brief reasons: creates an immediate estate, many times does away with need of an executor, gives additional security to creditors, perpetuates a father's care by monthly income through one or two generations, protects sacred interests, endows colleges and other institutions, takes funds out of PROSPECTS WHERE FOUND HOW FOUND 93 speculations, pays inheritance and other taxes imposed at death, endows old age, etc. Perhaps the greatest possibilities in all your field are to be found in this class. Men herein constitute the keenest, most experienced, most rational, most able of all. It is a great pleasure to do business with them. (e} Farmers Artisans etc. Thrifty farmers who read the papers, and skilled mechanics who get good wages. Protection for loved ones and other usual arguments. These men are usually thoughtful and reasonable. Policies will not be large in this class, but they will stick. In case of mechanics, see book of instructions. (/) Partnership and Business. Joint Life payable to survivor, an official's life to preserve business in case of death, on heads of departments, employes in banks, etc. A wide territory for intensive work. Brief reasons: one's knowledge, connections. a.nd good will are hard to replace, capital might be withdrawn from business, creditors become uneasy, perpetuates the earning power of the deceased, valuable collateral when more capital is desired, protects endorsers, buys out a retiring partner's interest, prevents disruption or disorganization of business. HOW TO FIND THEM 2. (a) Read the Daily Papers for information about those with whom you are acquainted. You should note promotions with increased salaries announce- ments of engagements or marriages persons coming suddenly into wealth because some relative died death of a citizen whose son you know rich men or women you know elsewhere moving into your town graduates from local colleges or schools lawyers who have won notable cases doctors who have performed great operations, etc. All such 94 MASSACHUSETTS MUTUAL TEXTBOOK information helps you convert an acquaintance into a prospect. Get after them quickly, don't wait! (b) Those already Insured in the Company. They know the value of insurance or they never would carry it -they have once been accepted, so will likely pass again they believe in our Company, and are undoubtedly satisfied with the treatment received you know their ages and occupations when their rate changes, when they pay a premium, just after recovering from a successful operation or a fit of sickness which would not make them unin- surable when a baby is born, etc. Among those you or your predecessors have insured will be found a most fertile field. Especially is this true with the Massachusetts Mutual, in which every policyholder is so well pleased. Many young men and women have proven good prospects to the salesman for policy after policy as they grew older. Watch out and let none of them be seduced into another com- pany while you sleep. Remember, if sold right, your policyholders become your best customers. (c) Through Help from Old Policyholders. When a person is pleased with your treatment and the Company's treatment even if fully insured himself he will be very glad to boost your business. He will, if properly coached, be on the lookout for prospects for you, and will locate many you would otherwise never have known. Properly insured and trained, every one you have written should furnish you at least ten good prospects per year both among people you know and those you have never met. Work this out. No other source of securing prospects, especially for big business, compares with this. Write them occasionally very briefly thank- ing them for past favors and suggesting that they don't forget you. Just a few words. See "Follow- ing Up." An autograph book in which each one PROSPECTS WHERE FOUND HOW FOUND 95 you have insured writes a word of praise for the Company and tells what he has done over his sig- nature. Great! Can't get them all to sign, but you can secure enough to make the book very help- ful letters of recommendation serve the same pur- pose. (d) Use of Company's Circulars and Pamphlets. Take notice that all literature furnished by the Company is merely an aid, and is not in any sense to take the place of a personal interview nothing will. Know every circular the Company provides. Never send any one an unmarked leaflet. Blue pencil some one clause you desire to have read and he will probably read it not otherwise. Don't swamp any one with circulars. Kill your chances, sure! When sending out these leaflets have careful regard to age, sex, business, financial conditions, etc. And remember that circulars followed up with a personal call lead to prospects they don't bring them to you except in very rare instances. Sending circulars as a general practice is a poor way to get prospects. (e) Special Occasions. When you pay an Endow- ment or death claim, it becomes a wonderful pros- pect-getter if used correctly. The man himself (if an Endowment), the widow, a brother, a sister, a son, an employe, a partner, the nurse, the under- taker, the doctor, etc. Wonderful! Then birthdays can be used to great advantage wedding anniver- saries, business anniversaries, birth of a baby (keep a list of babies and dates of birth and send some little token each year) payment of dividends both when the insured is paying renewal and after a policy is paid-up. Payment of yearly installments (or monthly) to beneficiaries all such times and occasions should be prolific in prospects. 96 MASSACHUSETTS MUTUAL TEXTBOOK (/) Straight Canvass. By this is meant soliciting without introduction or other preliminary assistance. Such work is more nerve-trying and demands far more skill than any other method, but, if done properly, some splendid results may be secured and the solicitor attain a high degree of efficiency. A few suggestions may help : 1. Find out everything you possibly can about the person before you seek the interview. Get information about his family, home, politics, religion, business, wealth, insurance, health, etc. Everything you can rind out. Be prepared. 2. See that you yourself are prepared. Be clean- shaven well dressed shoes polished senses alert stout hearted. 3. You must get into his office, or presence. Unless guarded by secretary, clerk, or other person, walk in. If necessary to send in card, send it, but write some little catch phrase that he will surely see. For example : " Have a business proposition to make you, will take five minutes." " Your daughter needs what my company furnishes." "Life is uncertain but my goods unfailing." Very many others use your capital in brains. 4. If shown in; don't enter like a trespasser or a man out on parole. Be bold (but not too bold), pleasant, polite always. Sit near him. Don't begin by asking him a lot of questions. You should know his age and a good deal more. You can get what else you want later in the interview. Put a clear, definite proposition before him, on a tablet so you will interest both eye and ear. Say nothing about cost until he asks about it. Now, listen, you are there to interest him to sell him. Don't let him put you ojff, insist on his immediate action for a dozen reasons, but do PROSPECTS WHERE FOUND HOW FOUND 97 it so winsomely so graciously he cannot take offense. Any agent who can walk into a man's office and sell him a policy of life insurance on the first interview is a prince of salesmen. SUGGESTIVE Among productive fields of work by the straight canvass, the following tips will be helpful: Overheard conversation on street car or elsewhere. Table talk at some function or cafe. Lists of members of exclusive clubs. Farmers who have had good crops. Society news. Year books of private schools for boys and girls whose parents might consider income insurance. Lists of property owners, especially large tax payers. Lists of sc/zo0/-teachers. Those just elected to office. Physiciansy5/ appointed to positions in hospitals, etc. News of employes, promotions, newcomers. Trade and other journals. Every solicitor should have a definite object fixed purpose every working hour. Go somewhere to see some one who looks likely. Never remain idle a minute. So will you develop personal poise and skill in dealing with them. CHAPTER XV APPROACHING THE KNOWN Under this topic we will refer briefly to the times and methods of bringing up the subject of his insuring. There's a fitness in this work. There are occasions when the subject will suggest itself. There is a psychological moment when mind and heart are receptive. There are methods which if properly employed will put one in a receptive mood. Each case requires careful study. The idea is to secure the application with the least resistance. OPPORTUNE TIMES Supposing you know him and he appears like a good risk and able to pay the premium : (a) When his heart is full of love for his dear ones you can tell. (i) After attending the funeral of a friend you might possibly be there, too. (c) When his bank has asked him for a little additional collateral and he tells you. (d) When you have been able to do him a kindness and he thanks you heartily. (e) When he is acting as the executor of the will of a friend. (/) One day when you lunch together and he asks you about your business. APPROACHING THE KNOWN 99 (g) When he has a narrow escape from a serious accident. (ti) When you have just paid a death loss to the widow of a friend of his. If you are wide-awake and your senses alert you will not lack for opportunities. They appear every day to the solicitor with the "Open Vision" if he is on the job. SOME METHODS (UNDER PRECEDING CONDITIONS) (a) "I greatly admire you for loving your family, Bill, but have you thought about their care, if you were suddenly taken?" This will open the question for discussion. (b) "Do you know, John, I was thinking of you while the friends were viewing the remains." Just after the funeral his heart will be receptive. (c) "I had a friend who used his policy as collateral at a bank. Maybe you could do so, too, if you had one." Will enable you to press the matter. (d) "That's all right, my boy, you needn't thank me for the little courtesy shown you. Just protect that little daughter of yours against her papa's untimely death. That will be thanks enough for me." (e) "You are closing up Henry's affairs, aren't you, Joe? Well, how about your own? Have you made your will? Why not let our Company take care of your family?" (It can be done under our Con- tinuous Monthly Income policy or under the Installment Option Provisions.) While he is finish- ing his work as executor. 100 MASSACHUSETTS MUTUAL TEXTBOOK (/) "Yes, Charlie, business is good. I wrote two applications yesterday. I could do more. You haven't done your duty yet, old man. Why not to-day?" While at lunch. (g) "If that automobile accident you were in doesn't make you realize how uncertain human life is, George, 7 don't know what will." An entering wedge just after he has recovered. (ti) "Here's a photograph of a check I just handed Jennie Brown. You know Jennie. Well, Arthur is dead, but he was a wise boy and protected his wife." He will think about himself and his wife, and there you are. Once more study men and the events and things that move them. The study of men will yield larger returns than the study of methods or theories. CHAPTER XVI APPROACHING THE UNKNOWN Among methods of approaching those you do not know, let me offer a few suggestions, and bear in mind they are epitomized and only suggestive : 1. Hand the person a circular. He will usually say, "No, thank you! Don't want any." Reply: "I haven't called expecting to protect your home to- day, but simply to ask you for permission to put you wise to our recent policy in ten minutes to- morrow at noon. I am too busy to-day. I am fully aware that you do not want any insurance now, but you may take more before you die and I want you to know a little something about our Company. I will not solicit your business, if you do not want me to, but it will do you no harm to see my goods, and it may mean much to you later on." You may get an appointment. 2. Another: "Beg pardon, sir, but I am representing one of the greatest institutions in the world, and while I know you have some of my goods (I have just had a short talk with Dr. X), I want very much to see if you are in physical condition to get more supposing you want it after we have deter- mined your eligibility. Here's a bottle, please give me a little specimen. I will have a micro- scopical examination made and report to you to-morrow. No expense. If when you receive my report you don't want anything further to do with me, you are under no obligations." With big men who know how easily kidney and other diseases creep into the system, this will not infrequently work. 102 MASSACHUSETTS MUTUAL TEXTBOOK 3. "Is this Mr. Jones? Well, my name is Blank. I have a draft on a New York bank which I wish to have cashed. Dr. B. couldn't leave his office to accompany me to your bank, so I could not be identified, but if you will call his office you can assure yourself that I am the man named on the draft. I will wait. Thank you. Before I go let me open an account for you with our bank in Spring- field. I mean, let me give your widow a draft backed by our entire assets that will be good when presented for payment in one week or forty years hence. The rest will be up to you and it's easy." Then ask him for an interview. 4. "Am I addressing Mr. C.? Well, my name is Blank. I understand you have a daughter eight years of age. As the representative of one of the oldest financial institutions in this country, I am engaged in providing a fixed monthly income for little daughters like yours. Several of your neighbors have already made such arrangements. I would like the privilege of showing you my plan." There are hundreds of other methods of approaching strangers in a straight canvass, but space forbids. This much can be said however, "The proper study of mankind is man." If the solicitor will study men more, the proper approach will suggest itself to his fertile mind, naturally, suitably. Here's a straight tip: Many a wall of opposition in front of a man looks impregnable, but it's made by a bunch of human folks just like us. There's many a solicitor for the Massachusetts Mutual who would be astounded at how easily he could drive his personality through the thickness of the obstruction in his path to success, if he'd only get over being afraid of a thing on account of its size and get a square look at its quality. CHAPTER XVII SUGGESTIONS ABOUT CLOSING Closing a person consists chiefly in overcoming objections to immediate action. By closing is meant getting signature to the application, securing settlement for the first premium, getting the person examined, and delivering the policy when issued. There is no objection or argument against taking a policy now but that can b.e honestly answered and successfully refuted. Not all of these objections can be considered in the space allotted, but suggestions will be made that will prove to be praiseworthy if employed. Before entering into details, you are hereby served with six injunctions: 1. In all your soliciting, tell the truth. Lies are unpleasant bedfellows. Honesty is the best policy, but, if it isn't, stick to it just the same. 2. Sell the policy not the Company, not an investment, not dividends the policy. 3. Talk protection, altogether, everywhere. 4. Give every person with whom you do business a square deal. 5. Talk and act so that policyholders and others will be glad to see you. 6. Talk with four persons, about insuring, each day, - PROMISE! 104 MASSACHUSETTS MUTUAL TEXTBOOK "NOT NOW" This is so common a statement from one with whom you have labored hard to insure, that it might be said, " You can expect it in 90 per cent of all cases." The following excuses will be offered : 1. "I am not ready" perhaps not, but when you are the Company might not want you. It takes two parties to make a contract of insurance. Cite cases of men both of you know, who are ready but no company will take them.. What do you mean by ready? You certainly can't mean you are now uninsurable, you seem so well, but are you sure? Let the doctor look you over. You certainly can't mean you are not financially able, because the premiums can be made payable to suit you. You must mean you haven't made up your mind to in- sure. Yes? Then the protection of your home and the dear ones is a whim, a sentiment, a mood, an emo- tion. Do your duty. There is only one time to do one's duty, and that is NOW! 2. "Must wait until I get my home paid for." Then what? You are older, perhaps uninsurable, and the time that you make the last payment is un- certain. Besides, who would pay for it if you died? Why ask your wife to carry the risk? Take out a policy and assign part of it to the man who holds the mortgage or contract so relieve your wife. Nearly every man who dies leaves a mortgage or other debts but most of them make provision. 3. "Have enough already." Dare say! But cost of living is increasing you can't tell how much your last sickness will cost, your wife's income after your death will not be so large as yours now, then your creditors must be considered, cost of administer- ing your estate, etc. What you now have invested SUGGESTIONS ABOUT CLOSING 105 at five per cent less income tax and other taxes is it much, now is it? Stop, think! You can add another policy why not NOW? 4. "Later perhaps, but not just now, my wife objects." So! If she objected to your buying something for the children, you wouldn't buy it. Your wife's objection doesn't discharge your duty to her or the children. Your wife doesn't fully understand the proposition, or she wouldn't object. Women don't view things as men do. If she were sick and needed a doctor and told you not to get one, would you? If you had a policy, and should die, would she be sorry you didn't let her .tell you what to do? would she use the money? Never fear, you love her and the children, do it NOW! 5. "7 like your policy, and will give you my promise to take a policy when I get ready. 11 Don't do it. You always keep your promises. Now, suppose / held you to it, and you refused to do business with all the other solicitors, before I could get to you, and you got sick or died, eh? What's the use? NOW while you can is the only time to keep your promise. No better company no better policy. How would three p.m. do? he could examine you in fifteen minutes. Thank you! We could multiply these suggestive methods of closing indefinitely, but must leave you to work them out. The following objections are a few of the most common ones you will meet in your work : "Never was in better health, don't need it." "Want to take a big policy when I take any." "I am in sore financial straits." 106 MASSACHUSETTS MUTUAL TEXTBOOK "I have no children." "My wife has money of her own." "Have all I can possibly carry." "It costs too much." "My business takes all my money." "I'll carry my own insurance." "See me after January 1." "Can put my money to better use." "Suppose the Company fails?" "I won't sign a note, and I can't spare the money now." "Expect to live to be 85. Father did." "Won't leave a lot of money for my wife's second husband." "I can save and invest my money as well as the Company can." "I can get insurance in my lodge cheaper than your Company can furnish it." "I have no confidence in life insurance agents." "Suppose my wife should die before / did?" "My family is well protected by investments." "Suppose I failed to pay the third premium?" SUGGESTIONS ABOUT CLOSING 107 "When are you coming around again?" "Go over and see Jones, if he does, I will." "I am a member of the United Brethren church." "Too busy to-day, but will take it to-morrow." "Wait until I gather my crops." "How much will you discount the first year?" And we might name many more excuses. Make up your mind in advance to hear these objections, and don't let them dampen your ardor. Every one can be refuted, and you can soon learn the arguments. CHAPTER XVIII Understand, please, this does not mean trailing a man as a hound follows his quarry before you secure his application. No! Your ambition, your desire for commission, your pride will spur you on to secure business. But after you have by hard, persistent, tactful work put his name on your books, what then? Well, several things. 1. Drop him a line a dozen words once a month; enclose a calendar, a souvenir, a circular marked. No dawdling! Be businesslike and be sure that what you write or send will either help him to understand his insurance better or inure to his personal advantage. 2. Call on him about every sixty days when you get a large clientele this will be impossible. Shake hands, congratulate him on his health, his business, Kis -work, his new baby, the size of his dividend just after he gets his renewal notice, his crops, etc. Find something to say that will make his heart warm. Remember that all the world likes a Jolly. And don't "bone" him for additional insurance every time you call. You can talk and act so that he will bring up the subject. There's where salesmanship shines. 3. Tactful courtesies towards him. Not only to develop loyalty to the Massachusetts Mutual, because of which he will insure in our Company, but to make him your friend. Invite him to your home to lunch to a golf game a fishing trip et al. Get under his waistcoat. For example: An agent FOLLOWING UP 109 of another company called one of our solicitors by phone one day. This is what he said: "I under- stand that Mr. F. is going to place a large line of insurance. Knowing that you are his close friend, I thought you would know about it and advise me whether I had better call on him or not." Our agent replied that he didn't think Mr. F. was going to insure, but he could call upon him if he wanted to and he didn't need to have permission either. He said, " No! I could not do anything with this man without your co-operation." See? Our agent saw his friend a few days later, and this is what he said after he had related the circumstances: "Do you think I would take insurance anywhere else in the world without first talking with you? No, indeed!" Our genial solicitor had been enshrined in his heart. He had followed him up right! 4. Until he boosts for you. By a process of suggest- ing, instructing, and training a little at a time, but none the less sure until our Company is engraved on the tablet of his affections. Until Massachusetts Mutual and its virtues come to his thought and tongue the instant any one says, "Life Insurance." He will send his son, daughter, brother, sister, and other relatives to you ready to insure. He wijl talk to his friends when you are not around, will advertise the Company more effectually than some agents can. The combined support of one hundred such "boosters" cannot be measured. CHAPTER XIX PRACTICAL SUGGESTIONS 1. Carry a list of prominent policyholders insured in our Company. Sometimes it talks louder than anything you might say. Autograph book referred to elsewhere is just as good. 2. In many states a discount is allowed on the inheritance tax if it is paid within a specified time after death, or an interest charge is made if it is not paid within a certain number of months. Persons leaving large estates can avoid the sacrifice of valuable securities, and can save money, by insuring so as to pay such taxes promptly. Great talking point with rich men. Use it. Complete protection can be secured through life insurance, as policies payable to a definite beneficiary, instead of to an estate, become exempt from the operation of the Federal Inheritance Tax Law. Another argument which can be forcibly used with people of means. 3. In your daily work, have a large fund of illus- trations of the benefits of insurance, the folly of delay, the uncertainty of good health, the saving in early rates, etc. And have them ready to use. If you haven't any, look about and get some, the busy world is full of them. 4. Many applications have been secured by getting the prospect to let the Examiner see him at 12 noon. Have the blank filled out as completely as possible from data secured elsewhere, and let the doctor get his signature PRACTICAL SUGGESTIONS 111 when he examines him. Talk "Can you pass?" and press it home by 'many questions. 5. Deliver all your talk with feeling. Mean it put life into it you must sustain the interest. Remember you are a business man discussing a matter of vital importance with another business man. You lose if you weaken, stammer, grow pale, or get nervous. 6. Monthly income for wife or for children is the opening wedge to many fine applications. The Massachusetts Mutual's contract duty consists quite as much in caring for the insured's family as it does in paying the claim promptly. When a monthly income is properly provided under our options, it cannot be commuted or collected faster than authorized. No lawyer needed to interpret benefits and secure fees, no executor to squander proceeds, no need of seeking safe investment for the proceeds of the policy, no loss through ignorance of business matters. These points can be elaborated, and they seldom fail to arouse keen interest. 7. Be on the lookout for corporations with valued officials and employees or co-partners who have large interests to protect dependent upon both or business men who depend in great measure upon some one employee. Commercial life insurance furnishes a lucrative field for the wide-awake solicitor, but he must develop it. 8. Be resourceful. Help load hay tend the baby assist in unpacking goods lend a hand wherever and whenever you can to assist a busy or needful man or woman. You will be surprised at their willingness to listen to you when you present your proposition. 9. When business does not come as fast as you wish, don't blame everybody and everything but yourself. 112 MASSACHUSETTS MUTUAL TEXTBOOK There are plenty of excuses that answer the summons paltry excuses but don't allow yourself to use them. Some other man in the same field is writing twice what you are, and he isn't any better man than you, only he has been studying himself and has remedied his weak points and strengthened his strong points. Self-analysis is what you need and a lot of it. You may have lacked energy system tact imagina- tion reason courage. Examine your failures and compare them with your successes and then correct them. So will you grow. 10. In proportion to the care you give the bene- ficiaries under policies you have placed, maturing by limitation (if Endowments) or death, will you ap- preciate the greatness of your work and increase your influence for good. Help them with proofs take drafts to them advise them about the use of the money, etc. Make yourself useful large returns, not only in new business, but also in the great joy which comes from real service. 11. Settlements when the application is written just after the examiner has passed favorably upon the applicant when the policy is ready for delivery. Best time is when application is written best form of settlement cash best amount, full annual premium. Here's where the rub comes. A man isn't sold life insurance until the salesman gets the settlement. Don't get "balled up" with a lot of notes get cash. A " Not Taken" policy hurts your record. 12. Don't appeal to friendship, charity, lodge, church, club, or any other motive or connection. Be inde- pendent. Use all of these and more, but never as a favor or plea for business. These are to widen and strengthen your acquaintance. When you reach the personal appeal for business, put it on its merits, the individual's need and the superior quality of the PRACTICAL SUGGESTIONS 113 Massachusetts Mutual' s contract. These are enough to make every sale. 13. Never allow yourself to recount your failures with groans which cannot be uttered. Don't get fussed up because some one turned you down. There's a law of average in soliciting. Out of a given number of prospects one is bound to make some sales. If you call on but two men a day and both turn you down, it is discouraging, but if the number is twelve and ten turn you down while two buy, you are happy. Get this idea of average well rooted in your mind. 14. Make your job joyful. Dwell on the bright spots cherish the friendships you have made talk about your successes carry a light heart and a smile. Happiness attracts. You have the best company, goods, territory, friends, chances, times. Blessed is the solicitor for the Massachusetts Mutual who knows, feels, and expresses the joy of his job. 15. Put yourself where your prospect will likely be ten, twenty, thirty, or more years hence. You must anticipate conditions if you expect to pry open stubborn wills. Is he in debt? what would you do? Has he great business cares? how would you feel? Is his wife an invalid? how would you act? Has he children to rear and educate? what would you think best? And so on. Then you can see from his eyes then you can fit him with the right policy. Get into futures. 16. A word about risks: 1. If you think your prospect's business is hazard- ous and it doesn't come under the list printed in Instruction Manual get advice from the Home Office before writing his application. 114 MASSACHUSETTS MUTUAL TEXTBOOK 2. If you think there is the slightest reason why a person would not pass because of some slight physical ailment, talk it over with the local examiner before making the Company the expense of medical fee. Besides, a favorable opinion of the local doctor might help you close him. The Home Office appreciates such care and thought- fulness. 3. If the Company rejects an application, get all the additional information possible and ask your manager to send it in. Possibly the Home Office has misjudged the man. It is as anxious for good business as you are. 4. If the individual has been previously rejected by our Company, before writing another applica- tion submit additional information through your Manager and wait for permission. 5. If the person has been previously rejected by nnother Company, get all the information possible and refer same to the Home Office before sub- mitting application. So will you save the Com- pany expense and yourself rejections. Put yourself in every instance in the position of the party who is to pay the face of the policy, and you will feel the importance of great care in selecting risks. CHAPTER XX STUDY Every solicitor for the Massachusetts Mutual must be a careful student, if he would be a success. Your study must be conducted along four lines: 1. Your Business, its purpose, plan, development, growth, destiny, etc. There is much in this to broaden your horizon and make a bigger man of you. Literature of all kinds is available, and a few minutes a day will give you a large fund of valuable information. 2. Your Company. You must know this well. Read Book of Instructions this Textbook again visit the Home Office every year when the A ssociation meets, and examine the workings of the different departments read The Radiator all the way through every month, and any other material whereby you may become more fully acquainted with our Company. The more you study it, the better satisfied you will be as its field representative. We have a most wonderful history and a remarkable record. 3. Your Work. This means plans, policies, times, men, other companies, insurance journals, com- petitors, territory, systems, etc. You will need to study your work as long as you live, for there are new plans and new things to learn being presented continually. If you can't learn, better quit this business. 116 MASSACHUSETTS MUTUAL TEXTBOOK 4. Yourself. A big field. You know your faults they should be corrected. You know your virtues they should be developed. Your moods, impulses, nerves, feelings, energies, mentality, affections, in- fluences, etc., are worthy most thorough analysis. Know yourself. Many applications have been lost because the agent was not in proper trim. His personality and labor did not co-ordinate. Study learn use keep. CHAPTER XXI WOMEN In keeping with the terms of its Charter, the Massachusetts Mutual Life Insurance Company since its organization in 1851 has insured, at the same rates as men, women who were eligible. Single women and widows with dependent beneficiaries will be considered on all plans except the Term. Married women are .only accepted jointly with husband (limit $2,500 and on any plan except Term) when there are children. However, the limit of amount is varied under exceptional circumstances. Married women professionally or commercially engaged are, ordinarily, acceptable risks. Disability feature is not granted to women applicants, except those who are actual -wage earners. The Home Office and many Agency Managers realizing the ever-widening field for new business among women encourage and make contracts with women to become solicitors among other women whose occupation, profession, or other conditions give promise of good results. Women agents have carried the standard of the Massachusetts Mutual into the ever-enlarging ranks of independent womanhood for many years, thereby bringing blessings to thousands of lives. The Company desires to pay tribute to the high character of its women representatives, and most heartily commends to every agency the establishing and maintaining of a Woman's Department to handle this rapidly developing branch of our business. It believes 118 MASSACHUSETTS MUTUAL TEXTBOOK 1. That women are becoming, more and more, a part of the business fabric of the world and need insurance protection as do men; and we should have them. 2. That women solicitors can secure such business better than men, and we should have them. 3. That, when possible, women physicians should be appointed examiners for women applicants, and we should have them. The advent of thousands of women into positions formerly filled by men indicates the wise foresight of our Company in opening its doors without rate restriction to this class of insurants, thereby providing a delightful and lucrative field for hundreds of com- petent solicitors. The general information and specific instruction contained herein apply to the work among women as well as among men. CHAPTER XXII TIME Every underwriter has the same number of hours each day, but not all use them in the same way. If one sleeps eight and plays eight, few enough remain for intensive work. Many successful men, however, do not cease labor under twelve to fifteen hours per diem. Agents seldom comprehend the full value of the rapidly passing hours until some emergency or crisis arises which arouses them to a deeper appreciation of this priceless possession. "Time is money," and the solicitor who fully realizes this will not waste any of it. The proper use of time makes a man a leader instead of one led. Makes him a signal success instead of a dismal failure. When properly employed, time will more than compensate for all defects in education, opportunities, or connections either social or business. The most capable the best educated the strongest connected the richest in opportunity, will ingloriously fail if time is lightly thrown away. The Massachusetts Mutual makes no hard and fast rules to govern an agent's use of time. It takes for granted that its representative will have energy and ambition sufficient to improve each working hour. It believes that efficiency in the use of time will do in one month what quackery cannot accomplish in one year. It urges each agent, not only to use all his time simply to fill up the hours, but to do so consistently. It suggests a specific plan for each day a schedule of trips, appointments, correspondence and living up to it. 120 MASSACHUSETTS MUTUAL TEXTBOOK A hit-or-miss, indefinite scheme of daily work not knowing where you are going next, results in nothing but nervous exhaustion. Two hours with each of four persons each day would be ideal and multiply your production by two, three, possibly four double the Company's volume and no one be a bit overworked. It takes some head piece to do this, but it will pay. Study out a system use card index make appoint- ments ahead, until you get where the days are not long enough. Thrift of time will give every capable solicitor in this business a net profit beyond his fondest dreams. Idleness is the surest road to failure. CHAPTER XXIII FIFTEEN RULES OF HEALTH ADAPTED BY THE NATIONAL SAFETY COUNCIL Air. 1. Insist on having fresh air in your home and where you work. 2. Wear light, loose clothing. 3. Spend part of your time in the open air. 4. Have lots of fresh air where you sleep. 5. Breathe deeply. Food. 6. Don't eat too much. 7. Eat various kinds of food. 8. Don't eat much meat. 9. Eat slowly chew your food well. 10. Have your bowels move each day. Habits. 1 1 . Stand, sit, and walk erect. 12. Don't dope yourself with drugs. 13. Keep away from contagious diseases. A ctivity. 14. Work hard, but play and rest, too. 15. Be cheerful. Try not to worry. CHAPTER XXIV A SALESMAN'S PRAYER The following contains much that every salesman needs. Read it every night after the day's work is done. Teach me never to wish for things, but to set out to attain them instead. Teach me to speak only of happiness and pleasure, and never to cry for the moon. I pray that I may never become diseased with the malady of meddling into the private affairs of other men. Teach me to dilute my work with play, to brighten my seriousness with jest, and never to take myself so seriously that I crowd from my life the joys and pleasures that are mine by heritage. Teach me to get the most from the companionship of the stars and trees and from my walks and talks with men. Teach me to be greater than my blunders and to absorb the philosophy that folly gives me the vision to acquire. May I never prophesy failure for other men, And may I always remember that one divine moment or hour carries us further along on our way than the tide of a day misspent can carry us back. Teach me to be more just and considerate of others, in order that I may have the sympathy to influence and direct them, A SALESMAN'S PRAYER 123 And may I never discuss the character of any man behind a closed door Thus giving him no opportunity to defend himself from the sin I have committed against him and against my finer and better self. May I never lose control of myself because other men do not believe as I do. May I always judge a tree by its fruit and men and women by their work and by the things to which they aspire. Teach me never to make myself a nuisance by advising other men how to live, the style of clothes to wear, and what to eat and drink. May I understand more and more that an agile tongue is the evidence of a shattered and sickly mind a mind saturated with suspicion for my neighbor and for those whom I pretend to love and befriend. Teach me to forget the mistakes I have made and the mistakes of other men, And may I learn that it is best to write the failings of men and women in the sand, near the water's edge. Teach me never to wear the double smile and never to go tiptoeing about with moccasins to malign and criticise and to carry "news," for these things ill become men and women. May my imagination never grow dim, and may there always be a place in my mind for the Butterfly of Fancy to spread its wings and fly. Salesmanship. 124 MASSACHUSETTS MUTUAL TEXTBOOK A FINAL WORD Have a definite statute of morals, and live up to it in your daily thoughts, words, and deeds. Shackle your vanity, else you might become a conceited coxcomb; husband your speech, lest a single word fails to reach its mark ; cherish your convictions, that they may abide with you vigorous and true, but, at the right time and place, let yourself out with the earnestness of perfect faith in your energies and principles. If you are possessed of knowledge common knowledge of common things learned from study, observation, and experience you will not only not fail, but you will achieve your full measure of success. INDEX PAGE Acquaintance, How to Increase. ..' 88 Actuary 17 Advance Premium Receipt 23 Agencies 21 Agent's Book of Instructions 115 Amount at Risk 23 Annual Dividends 46 Annuities 61-64 Benefits Under 63 Deferred 62 I mmediate Life 61 Joint Life and Survivor 63 Armstrong Investigation 44-45 Assessment Insurance 34 Principles of 34 Unlawful in Massachusetts 50 Assets 23 Assignee 23 Assignment 23 Beneficiary 23 Cash Surrender Value 23 Changes. . .' 24 Closing 103-107 Committees 19 Continuous Monthly Income 65 Counsel 18 Definitions 22-37 Digest of Massachusetts Insurance Laws 41-51 Directors 16 Discounting Premiums 24 Dividends 24 Elizur Wright. . 38-40 Endowment Option 59 Endowment Policy 25 Errors 25 Excuses Offered 104-107 Expectancy 25 Expenses 49 Extended Insurance. ". 25 126 INDEX PAGE Final Word 124 Following Up 108 Gross Premium 25 History of Life Insurance 7-9 Incontestable 26 Industrial Insurance 26 Inspection 26 Installment Options 66-73 Option A 66 Option B 68 Option C 69 Option D 71 Insurable Interest 26 Investments 19-20 Bonds 19 Mortgage Loans 19 Policy Loans 20 Joint Life Policy 26 Kinds of Insurance 34-37 Assessment System 34 Level Premium System 36 Mutual 37 Natural Premium System 35 Stock 37 Lapse 26 Laws of Massachusetts 41-51 Acts of 1858 and 1861 42 Act of 1880 43 Act of 1887. ..." 43 Act of 1894 44 Acts of 1896 and 1900 44 Act of 1907 45 Non-forfeiture Laws 42 Legal Reserve 27 Level Premium 27 Level Premium Insurance 36 Liabilities 27 Life 6 Life Insurance 22, 34-37 Basic Principles of 22 Kinds of 34-37 Assessment System 34 Level Premium System 36 Mutual 37 Natural Premium System 35 Stock.. 37 INDEX 127 PAGE Limited Payment Life Policy 27 Loading 27 Loan Value 28 Massachusetts Digest of Laws of 41-51 First Commissioner of 38 Inauguration of Insurance Department 39 Peculiar Benefits of Laws of 48 Massachusetts General Hospital Insurance Company 50-51 Massachusetts Mutual Life Insurance Company Aims 10-12 Capital Stock 12 Character 14-15 Charter 12 Growth 13-14 Home Office 12 Officials 16-19 Maturity 28 Medical Director 17 Medical Examiners 21 Mortality 28 Mortality Table 28 Mutual Company 37 Natural Premium 29 Net Premium 29 Non-forfeitable 29 "Not Now" 104-107 Objections Offered by Prospects 104-107 Officers of Company 16-19 Actuary 17 Counsel 18 Directors 16 Medical Director 17 President 16 Secretary 17 Superintendent of Agents 18 Superintendent of Loans 18 "Old Line" Company 29 Ordinary Life 29 Paid-up Additions 29 Paid-up Value 30 Policy Contracts 52-53 Annuities 61-64 Cardinal Features 54-60 Endowment Option 59 Kinds 53 Ordinary Life 53 128 INDEX PAGE Ten Year Term .54 Twenty Payment Life 54 Twenty Year Endowment 54 Valuation 47 Policy 30 Premium 30 President 16 Prospects 91-97 Provision for Waiver of Premium 58-59 Radiator 115 Rebate 30 Renewable Term 31 Renewal Premium 31 Representatives of Company 11 Reserve 31 Restoration 31 Reversionary Additions 31 Risks 113 Rules of Health 121 Salesmanship 78-82 Salesman's Prayer 122-123 Secretary 17 Selling 83-114 Approaching the Known 98-100 Approaching the Unknown 101-102 Following up 108 Means of Increasing Acquaintance 88 Methods 99-100 Practical Suggestions 1 10-1 14 Preparation 83 Prospects ' 91 Suggestions about Closing 103 State Supervision 31 Stock Company 37 Study 115-116 Superintendent of Agents 18 Superintendent of Loans 18 Surplus 32 Talking Points 74-77 Taxes 33 Temporary Term Insurance 33 Term Policy 33 Time, Use of 119-120 Trustee 34 Valuation of Policies . . 47 Women.. ...117-118 Wright, Elizur 38-40 This book is DUE on the last date stamped below 1 UC SOUTHERN REGIONAL LIBRARY FACILITY A 000190280 8