THE PROGRESS OF LIFE ASSURANCE.
[To THE EDITOR OF THE " SPHOTATOR.1
SIR,—The prevailing soundness of the opinions advanced in your valuable paper, and, their consequent general acceptance
by your readers, make it most desirable that an occasional shortcoming in this respect should be pointed out ; and the can- dour with which the Spectator is conducted satisfies me that you will allow this to be done with reference to some statements in your article of the 8th instant, under the above heading. Passing the initial remark that there is a pause in the expan- sion of Life-Assurance business with a simple note of interro- gation, and similarly querying the observations as to the better terms and stricter guarantees for solvency of American Offices, I would venture to give a complete denial to the assertion that Offices posture as public benefactors rather than trading con- cerns, and that they treat their would-be insurers as swindlers, did not these two assertions contradict each other. The directors of an assurance company exercise the same judgment and care in forming their contracts as any other body of business men, but, in doing so, practise almost as much courtesy and patience with the foibles and ignorance of humanity as an .editor, I cannot put it more forcibly.
As to accounts. Twelve years ago, an Act was passed which made it obligatory on every Life Company to publish annually a statement of its position ; such statement to be in a form pre- scribed especially with the view that it might be " understanded of the people." This is now invariably done by all Offices, and "any ordinary clerk," or anybody else who takes the trouble to examine these accountings intelligently, can, with very small expenditure of time and trouble, ascertain accurately how an office stands. That the public will not, as a rule, take this trouble, and prefers to assure with whatever office a friend is agent for and recommends, is certainly not the fault of the Offices. The suggestion that an action for libel would follow any pointing-out of a company's shortcomings is an unfair one. I cannot, at the present time, think of a single instance in which a company has made fair criticism, however unpalat- able, the basis of a prosecution. As a matter of fact, the Com- panies are subject to a large amount of intelligent and, for the most part, valuable criticism, by the financial and insurance journals; and in addition, submit with great nonchalance to the animadversions of amateurs in the columns of the general Press.
With regard to the position of a policy-holder who cannot, or will not, by paying his premiums regularly, fulfil his share of the contract, your correspondent " J. W." has already pointed out the Positive plan, which, however (pace " J. W."), is prac- tised by many Offices. The limitation of the number of pay- ments which this plan requires necessitates a proportionate increase in each payment, and for this, or some other reason, very few people take advantage of it. Under the ordinary system, however, most Companies give a " free, paid-up policy," iu some cases for the full amount of premiums received and bonuses added. Again, some Offices will allow a policy to be reduced in amount, and grant a fair return for the premiums paid under the cancelled portion of the risk ; some will permit suspension for a year or so, and even longer, under special con- ditions. I have seen the right to revive a suspended policy claimed and granted, where the assured was known to be dying. The proposal that an office should, in case of default, return all premiums, must have been intended as a joke. Any thoughtful schoolboy could demonstrate its impracticability.
I have already occupied so much space, that I can only refer most briefly to the paragraph dealing with the question of the medical selection of assurers. Your contributor's own case goes for nothing. He has happened to live (although he had pro- bably shortened his life, more or less) ; but the odds when he proposed to assure were that he would die, and so the doctors very properly declined him. I know dozens of "creaking doors" who have lived to become standing reproaches of Assurance Companies, but they are not half so eloquent as the pages in Claim Registers which tell the result of accepting deteriorated lives. If some one will get an Act passed making life assur- ance compulsory on everybody, it will then be time enough to talk of dispensing with medical examination. Till this is done, the.Offices which did so might be sure of driving a roaring trade ; but their existences would be as precarious as those of the assurers they would attract. Of course, a bad life "objects to have all his weak places found out " (although not he, but the office, pays the guinea) ; but, on the other hand, the eligible assurer is not, in my experience, at all averse to a medical examination.
Life Assurance as now practised is not perfect, but it is a great deal better than the picture given of it in your columns. There are points in it which call loudly for reform and advance- ment, but your contributor has failed to indicate them. It is not as popular as it should be, but it is growing more popular yearly, and deservedly so. Considering the amount of ignorant selfishness it has to fight against, it seems hard that whenever " the pulpit of the nineteenth century " condescends to refer to it, the tone should be one of almost invariable censure and faultfinding, too often indicative of an insufficient acquaint- ance with the subject. In most cases, one is not surprised, and passes on with silent contempt ; but when the Spectator also joins the enemy, it is too much !—I am, Sir, &c., [Our correspondent just proves what we said,—that it is impossible to criticise Insurance Offices without their fancying themselves attacked. We never said the Offices did not publish accounts, but that the accounts they publish are intelligible only to experts. What single offices may do is no answer to our objection that the body of Offices do not do enough in the way of protecting insurers who fail to pay up. Mr. Dibdin is very contemptuous about our " counsel of perfection " as to returning premiums, but does he really mean to say that heavy annual deposits without paying interest would really injure an insur- ance office ? The obligation to return certain premiums merely means treating part of the premiums as deposit. As to medical certificates, he must keep his opinion. We had high medical authority for ours, and adhere to it. The extra risk is a mere question of mathematics, and is run by the great Benefit Societies.—En. Spectator.]
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