People's Pilot, Volume 6, Number 14, Rensselaer, Jasper County, 24 September 1896 — They Have a Reason. [ARTICLE]

They Have a Reason.

Rich has been the harvest of lapsed life insurance policies during these hard times, and it is no wonder that the great corporations that pay theiriofficials such enormous salaries as to lead Li Hung Chang into ridiculing a nation that pays such officials as much as it does the president of the republic, should attempt to frighten their patrons into supporting the gold standard; it certainly is to the officials interest to have it maintained. Like professional politicians, corporation officials salaries are the same now as they were before demonetization (if not even larger) and, by the virtue of the fall of commodities, have nearly a double purchasing power. Both classes are generally men who care more for the “honesty” of their dollar than they do for the welfare of the people. But the truth is that the profit in life, accident or endowment insurance lies in the lapsed payments —few agents make any secret of that. About 75 per cent of the annual premiums is put into the legal reserve fund, leaving 25 per cent to pay all salaries and running expenses. A conservative estimate places the number of policies that lapse payment of at 50 per cent. When a policy lapses the reserve fund no longer requires the deposited 75 per cent as a guaranty for payment of the policy. The agent is required to “write up” a new policy for each lapse, without receiving any commission for it. Hence all that has been paid up on a lapsed policy is clear profit. The Metropolitan alone wrote up nearly $>200,000,000 of insurance in 1895. Imagine the amount that must have been paid in to all the companies this year, and think of 50 per cent of it x being actually presented to them by the class to it may “mean bread and butter! The per cent of lapsed policies must ever increase as the burden of the wage-earner and salaried man increases under a continued contraction of the currency. How splendidly the poor working bird’s feathers will contribute to the feathering of the twelve-story corporation nest! The more lapses there are the less liability there is of death lo&sps, and the harder the times the easier it is to induce men in desperate circumstances to attempt to provide for their families in case of their death, and the greater the certain!ty that the policies will lapse. No wonder the companies favor hard times and tfie gold standard.