Life insurance policy

“ I was recently waited upon by an important man.
"Lawson, what are you doing in life insurance?" he asked.
"Giving facts about the life-insurance branch of a 'System' which is foully plundering the people," I answered.
"What are you trying to do?"
"Educate the millions of life-insurance policy-holders to their present peril; after they are educated, arouse them to quick, radical action." ”

“ Every widow and orphan in the United States who receives the benefit of a life- insurance policy owes a blessing to Elizur Wright, who was the first to establish life insurance in America on a strong foundation, and whose reports on that subject, made during his long term as Insurance Commissioner for Massachusetts, have formed a sort of constitution by which the policy of all life-insurance companies is still guided. ”

“ Just so soon as we begin to talk about things. A man that can afford only last March to take out a new five-thousand-dollar life-insurance policy—"
"'Sh-h-h-h, Becky."
"For why shouldn't your children know it? Yes, up-stairs in my little green box along with my cameo ear-rings and gold watch-chain I got it put away, children. A new life-insurance policy on light-blue paper, with a red seal I put only last week. When a man that never had any insurance before takes it out so easy he can afford it." ”

“ A policy of life insurance is a contract susceptible of ownership like any other chose in action. It 'is not an assurance for a single year, with a privilege of renewal from year to year by paying the annual premium.' It is 'an entire contract of assurance for life, subject to discontinuance and forfeiture for non-payment of any of the stipulated premiums.' N.Y. Life Insurance Co. ”

“ Such instalments are clearly not intended as the consideration for the respective years in which they are paid; for, after they are all paid, the policy stands good for the balance of the life insured, without any further payment. Each instalment is, in fact, part consideration of the entire insurance for life. It is the same thing, where the annual premiums are spread over the whole life. The value of assurance for one year of a man's life when he is young, strong, and healthy, is manifestly not the same as when he is old and decrepit. ”

“ Life Insurance Policy—Change of Beneficiary—Trust.—A took out a policy of insurance upon his own life, payable to his mother, who, together with A’s sister, furnished the money for the first premium. Eight years later A surrendered the policy, which had been shown, but never delivered, to his mother. ”

“ The agents, however, have not found opportunities enough in the orthodox forms. They have inspired the invention of numerous picturesque, contracts. Under their houndings the actuary's life has become a burden. In reality, there are only three forms of life insurance; the regular life policy, payable at death; endowment, payable to the beneficiary at death and to the insured provided he survives a stipulated period; and the term policy, which insures a man, not for life but for a certain period, ten, fifteen, or twenty years. ”

“ In life insurance, however, we have shown that the premiums contain a third element, namely, the portion that is set aside and accumulated to meet the risk of the insurance when the premium payable is no longer sufficient of itself for that purpose.
When a policyholder withdraws from his contract with a life insurance office, the provision made for the future in respect of his particular insurance is no longer required, and out of it a surrender value may be allowed him for giving up his right to the policy. ”

“ It is true that many kinds of life insurance policies protect against death, and that death is an event certain to occur to the insured, but the real purpose of the policy is to give protection against the uncertainty of the time of death. The uncertainty of the thing sought to be protected against is as great in life insurance as in any kind of insurance. ”

“ Term life insurance, so called, is simply banking for the benefit of the company which takes the risk. In regular life insurance the insured has a certain expectancy at the time of taking out the policy. Payment for the amount he is to receive at death is spread out over his expectancy, less four per centum interest compounded, and he pays it in annual, semi-annual, or quarterly installments, as may be agreed upon. If he lives out his expectancy, he will have paid in all he is to receive at death, either directly, or by the interest carried on his premiums. ”

“ A policy of life insurance, without restrictive words, is assignable by the assured for a valuable consideration equally with any other chose in action, where the assignment is not made to cover a mere speculative risk, and thus evade the law against wager policies ”

“ He regarded life-insurance simply as a family protection; on the part of the insured, he declared again and again, it was a purely unselfish act. No policy-holder must himself expect to benefit from his policy. ”

“ Time was when anybody with money could be a banker, but now it is conceded to require special gifts and a special training. I place life insurance right up in the front rank of the professions, for it is semi-philanthropic. We are not in it for our health, of course, but, if we are conscientious and earnest, we may reasonably flatter ourselves that we are doing a vast amount of good in line with our work. The life insurance solicitor has been the butt of many jokes. ”

“ In its consideration the status of a policy-holder in a life insurance company must be taken into consideration. To thoroughly understand what that status is, it is necessary to examine carefully the contract on which it rests. Each policy in a life insurance company provides for a life-long engagement on the part of the assured. He is to continue to pay premiums as long as he lives, if he does not anticipate them by a single payment, or by several payments. On its part the company agrees to pay to the assured, or rather to his nominee at the death of the assured, a certain sum. ”

“ The cost of life insurance is based on the expectation of life at different ages. The expectation of life, for example, of a girl of ten years of age is about 48 years; at fifteen about 44 years; at twenty about 40 years, and so on, decreasing year by year, till at last it dwindles down to nothing at all.
A period of grace, most commonly thirty days, is allowed after each life premium falls due. If it is not paid within that time, the conclusion is come to that the policy-holder intends to drop the contract. ”

“ The year after that you take the same policy in the New York Life. The fourth year you come back to the Equitable; and repeat the performance indefinitely.
Occasionally, a rebated policy-holder becomes physically impaired;—what is known as a bad risk. Then sticks in the company into which he was last rebated. A sick man always hungers for life-insurance. A man who ordinarily could afford a $10,000 policy takes one for $100,000 at 90 per cent off. If he falls sick, his relatives and friends gladly pay the few remaining premiums; and his widow, at death, pockets a neat $100,000. ”

“ Of course there is a certain amount of loading in the premiums he pays, but for the purposes of our illustration, that need not be considered. In this plan, the policy holder is really insuring himself, and when he dies his beneficiary, or estate, simply receives back the money he has paid in. The fact that there are so many life insurance companies and that they have become so wealthy and powerful, illustrates the power of interest, especially when it is compounded. ”

“ I believe that life insurance is doing a great deal to induce the habit of saving. When a young man on a salary or a definite income takes out an insurance policy he has a definite aim. He has made up his mind positively to save so much money every year from his income to pay his premium. ”

“ And the average life policy becomes a claim thirty years after the first payment is made. Again, the company receives much larger amounts than the actual insurance cost. This peculiarity results from the fact, described in the first article, that men will not pay for their insurance as they go. They will not pay its actual cost this year, its actual cost next, and so on—on the natural premium plan, that is—but insist on paying the same amount each year—or a level premium. ”

“ At the beginning, therefore, it is plain why life insurance, in the usual commercial sense, is not an investment. The company puts your premiums at interest, not that it may furnish you a return in addition to the insurance, but that it may accumulate a fund out of which the policy itself is paid. ”

“ This being the case, we may expect life insurance companies in the future to become active in life conservation. Already there are probably fifteen million policy holders in the United States insured in companies which are trying to do something for their health—through medical examinations, instruction in hygiene, utilization of visiting nurses, participation in civic health movements and otherwise. To save human life merely to save money is sordid enough, but it is well to harness commercial motives, when possible, in the service of humanity. ”

“ Let the state issue life insurance at cost and compel every person who has dependants to carry a policy payable on the annual installment plan. For 5 or 6 cents a day it can, without loss, issue a policy to every man in America that will provide his family with the necessaries of life for at least ten years after his death, and the man who cannot pay that premium is worth precious little to anybody considered purely from an economic standpoint. If the state wants to bring damage suits for the slaughter of its citizens, well and good ”

“ In life insurance the reserve means the amount, accumulated by the company out of premium payments, which is attributable to and represents the value of the life insurance elements of the policy contracts. The premiums include enough, over and above what is needed to maintain proper insurance reserves, to provide for the discharge of coupon liability according to the terms of the policy. ”

“ Probably the most common is the regular life, under which the insured pays certain fixed premiums throughout life, and the beneficiary receives the amount of the policy only upon the death of the insured. Life insurance policies in which the investment feature is prominent, are generally called endowment policies, and they require [Pg 439] the insured to pay a certain premium, annually, for a certain number of years. ”

“ The National Service Life Insurance Act is the congressional mode of affording a uniform and comprehensive system of life insurance for members and veterans of the armed forces of the United States. A liberal policy toward the serviceman and his named beneficiary is everywhere evident in the comprehensive statutory plan. ”

“ The decisions upon the effect of a policy of life insurance which provides that it shall be void if the assured 'shall die by suicide,' or 'shall die by his own hand,' go far towards determining this question. ”

“ Life Insurance.—The contract of life insurance is a mutual agreement whereby the insurer agrees on the payment of a fixed sum or premium to pay to a person designated in the policy on the happening of a contingency, usually death, a sum of money. By another form of insurance the insurance may be made payable at a fixed time, or before, should the insured die before that period. ”

“ By the Revised Statutes of Missouri of 1879, in force when this policy was made, it was enacted as follows: By section 5983, 'no policy of insurance on life, hereafter issued by any life insurance company authorized to do business in this state, shall, after payment upon it of two full annual premiums, be forfeited or become void by reason of the non-payment of premium thereon ”

“ Item Third—
“I have $30,000 life insurance which was made payable to my wife Louise L. Brewer—I find in the several policies different provisions respecting the beneficiaries in case of her death—To{341} carry out the intent with which these policies were taken out I give & bequeath to my said daughters, share and share alike, those policies & all sums which may be due thereon—The policy in the N. Y. Mutual provides for a 20 year 5 per ct. ”

“ The receipt by an agent for the first premium, or of a note therefor, subject to the approval of the application by the company, does not effect a contract between insurer and insured.
Some states have enacted statutes prescribing requirements for life insurance policies, or standard forms. Delivery to a third person for the insured may be sufficient. The contract becomes complete when the policy is put in the mail, postage prepaid, for delivery in due course to the insured. ”

“ Theoretically only one is indispensable; the mortality law. This enables the company to foresee, for a long period of years, its annual expenditures, and consequently to make provision for their payment. With this principle alone, however, life insurance would not be an accomplished reality, because its cost would be excessive. The interest element, by making life insurance cheap, brings it within the purview of the poorest citizen. It transforms life insurance from an unutilized theory into a most salutary fact. ”

“ In taking out an insurance policy one pays for it in dollars and cents, always at liberty to discontinue payments. If, however, woman's premium is her husband, she pays for it with her name, her privacy, her self-respect, her very life, "until death doth part." ”

“ If he had recovered the use of hand or foot and was not otherwise disabled, his right to benefits had ceased, and the payment of the premium was again a contractual condition. There is nothing to show that the insurer was not acting in good faith in giving notice of its contention that the disability was over. Mobley v. New York Life Insurance Co., 295 U.S. 632, 638, 55 S.Ct. 876, 79 L.Ed. 1621, 99 A.L.R. 1166. If it made a mistake, there was a breach of a provision of the policy with liability for any damages appropriate thereto. We do not pause at the moment to fix the proper measure. ”