Ordinary Life, Twenty Year Pay Life and the Endowment are the Most Popular Policies.
INSURANCE COMPANIES HELP SMALL INVESTORS
BUSINESS & INVESTMENTS
Ordinary Life, Twenty Year Pay Life and the Endowment are the Most Popular Policies.
/N A RECENT article the vuiny advantages of insurance as an investment; the importance of protection as an early necessity and the fact that an investment in oneself is a sound investment were outlined in a general way. This article takes up three of the most popular kinds of policies and endeavors to show how each fit in with the idea of insurance as an investment.. .Other articles dealing with business insurance, co-insurance and certain other phases will be published in subsequent editions.
NINETY-NINE out of every hundred persons, when taking out life insurance, leave the class of policy best suited to their needs to the judgment of the agent or the company. It is a surprising fact that very few people know little in regard to even the most popular policies and are entirely at the mercy of the salesmen when placing their business, life or fire insurance. In life insurance there are three principal policies: the ordinary life, the endowment and the twenty-year pay life.
The ordinary life policy is insurance in its simplest form. Of all policies which afford protection throughout life, the ordinary life plan is the one which provides it in its maximum amount with a minimum premium. The premium, though adequate, is lower than that of any other kind of policy which contains provisions for cash surrender and loan
Many of the cheaper forms of life insurance call for a premium which increases from year to year so that when the policy holder comes to an old age and a time of life when he should be relieved of burdens he finds himself confronted with a premium that is difficult to meet. This point has been the cause of many discussions with the result that some of the leading companies have changed their policies so that the premiums never increase but may be reduced by the dividends on the policy from time to time.
This type of policy provides that the Insurance shall not lapse for nonpayment of any premium, after it has been in force two years, if, at the due-date of the premium, the reserve, after deducting any indebtedness and the interest accrued thereon, shall exceed the amount of the said premium. The amount to be deposited annually is so low as to bring this plan within the range of all. No man whose physical condition permits it need go uninsured. By taking advantage of this plan, many people are enabled to reap the great satisfaction which comes to one who knows that all contingencies of life are provided for, and who would not otherwise be able or willing to assume the obligations which other and highernr>ced policies involve. Many a family, bereft of the bread-winner, is now enjoying comforts of life which it would have been impossible to provide for them had not such a plan as this been available.
It is not to be inferred from this, how; ever, that the policy is adapted only for the man of slender means. It is no more for him than for the man who is well-todo. It is for every man who aims to bequeath to his loved ones, after his death, a competence in some measure commensurate with that which he is able to supply to them during his life. Here is the way opened up to do it in a manner that perhaps has not before been presented, or, if it has, has been passed carelessly by.
An Endowment Policy is one on
which the deposits are made for a stated term of years, at the expiry of which time the policy is worth its face in cash, in addition to the profits that have been earned thereon. Too often it is regarded as being an expense, when as a matter of fact it is the ideal method of systematic saving during one’s productive years. When one purchases bonds or real estate, or any high-dass security, it requires considerable cash outlay to do so or a stipulated cash deposit and satisfactory collateral. Not so with an endowment, as the purchase is completed by yearly deposits, and in the event of death there are no further payments to make as with other investments, but on the other hand the face of the policy is at once payable. It will be readily seen that the holder of an Endowment Policy assures himself of an estate equal to at least the face value of the policy. There are comparatively few people who have large sums of money for investment a one time, and the average person often finds it a difficult matter to choose, a satisfactory investment for the small sums they have occasionally available. It is here that insurance comes in as a help to investors. The small sums of money, which in the aggregate form a large fund, are invested by the Insurance Company in large sums in sound and safe undertakings and part of the profits that would not otherwise accrue to him, are turned over to the policy holders.
There is another advantage in the endowment policy in that it costs nothing but the purchase price. There are no maintenance charges, no taxes, no repairs or amounts to be written off for depreciation. Its permanency is assured and it cannot be stolen, damaged or destroyed. The fall of the market does not affect it in the slightest and on the other hand its value continues to rise year to year. These last statements are good for all insurance policies and are facts that make the taking out of policies a good investment in their security and a great asset in the protection.
By an old act of parliament insurance policies have been made inalienable so that creditors ennot touch them and no judgments can be rendered against them. They cannot be seized for debt and in short it is a trust that cannot be alienated from the person for whom the trust is created.
Protection is Essential
“ A ETER I had considered insurance ix from every angle,” said a wellknown business man not long ago, in telling his friends how much insurance he carried, “I decided that the 20-Pay Life was the policy that would meet every contingency for the average man, and so, with the succeeding years, I have increased my holdings of this plan at different intervals. In the first place, like everv other man, I hope to live to a ripe old age, and furthermore. I want my insuranee paid up as early in life as possible. You know, a person’s earning power declines after middle life. In the second place, I realize that my salary stops with my pulse, and that my wife and children need the protection life insurance affords, to offset the loss of my salary. I further realize that two plus two would still equal four after my death, and a thousand dollars or two would not keep the wolf from the door forever. Some men are so unreasonable, or perhaps I should say they are not rational, when it comes to figuring how their wives and families could subsist on their estate. ' Two thousand dollars at 6 per cent, interest only produces an income of thirty-two cents a day, yet very few People look at it in guch a practical way_.
“The third reason that made me consider Life Insurance was a study of statistics to the effect that seven-eighths of all estates was comprised wholly of Life Insurance. Now, I thought to myself as I studied those figures, life insurance must be gilt-edged when it is the chief asset of so many estates. So it is, and furthermore it is always the first asset realized on because it is always worth par. There are no fluctuations in its value.
“Upon considering the matter further, I saw things in another light. Often I had dreamed of wealth, like thousands of other men, yet when it comes down to cases, how many men actually acquire wealth? If it were not for the Insurance represented in those estates, think of the extra burden we have to bear to maintain orphanages, and poorhouses for those widows and orphans. I want my loved ones to be wholly safe in this respect. Staring me in the face are the statistics covering one hundred average men starting life at age 25. Only five are wealthy at 65, and fiftythree are dependent on their children or charity for support, while thirty-six are dead. Ere I am 60, if I am not wealthy, my insurance will be fully paid for and I will enjoy the accumulations therefrom until my death.”
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