Saturday, June 16, 2012

Life Insurance and Its Relationship To Our People, by Hon. Grover Cleveland,

April 23, 1908, The Spectator, Vol 80, No. 17, [Section 2, Quinquennial Number, The Spectator, 1868-1908, Fortieth Anniversary]

Life Insurance and Its Relationship To Our People, By Hon. Grover Cleveland, Ex-President of the United States, (Special Contribution to the Quinquennial Number.)

IN these days when the accumulation of vast fortunes and the extravagance pervading our public and private life accompanied by widespread financial depression lead pessimistic prophets to paint only sombre pictures of the future of our nation there is in my judgment no stronger refutation of their gloomy forecasts and no more convincing evidence of the individual thrift of the American people as a whole and their abiding sound sense and dutiful foresight than is found in the remarkable expansion of American life insurance in the twenty five year period from 1880 to 1905 At the dawn of that epoch in our history life insurance was already a firmly established institution in this country but because it had just undergone a severe setback due to the financial unrest of the early 70's and for various other reasons it might almost be said that in 1880 it was only entering on its permanent career of far reaching beneficence At that time all the regular life insurance companies of this country had in force policies aggregating in amount only about $1,500,000,000 whereas during the quarter century ending with the year 1905 the combined aggregate of life insurance carried by the regular companies increased by leaps and bounds reaching during that period the colossal figure of nearly $13,500,000,000 and not only was there an approximately nine fold increase in the aggregate amount of this type of life insurance carried but during the time specified the per capita life insurance in force for each unit of our population grew from approximately $30 in 1880 to ahout $160 in 1905 At the same time the development of the industrial branch of the business had carried the blessings of life insurance into many humble homes in which they otherwise would have been unknown While within the period mentioned the number of so called ordinary policies that is policies for Siooo or more increased to nearly 5.000 000 the number of industrial policies in force in the United States increased from less than 1.000 000 in 1880 to more than 22,000.000 in 1905 Thus it is made apparent that the great expansion of the business taking into account industrial with ordinary insurance was not restricted to any particular section of our population but embraced all chsses of the American people.

Even if the amount of insurance carried in foreign countries by American life companies at the end of 1905 should be deducted, still the aggregate of all life insurance in force in this country at that date was practically equivalent to an average of $150 for every man woman and child in the United States---a record surpassing that of Great Britain by approximately forty per cent, and completely distancing that of all other countries.

This showing in my opinion not only furnishes absolute proof of the prudential foresight and sober temperament of the American people, but attests their settled faith in American life insurance.

The American people have had more than sixty years' experience with the American plan of legal reserve life insurance, and the fact that about 15,000,000 of them---men, women and children---as nearly as can be estimated, are now carrying life insurance policies can only mean that they have become convinced of the certainty of that form of protection against the emergencies and uncertainties of the future.

The recent outcry against life insurance companies in general was born of sudden, though not unnatural, indignation resulting from the exposure of breaches of trust and bald malfeasance on the part of a few insurance officials, who were deservedly swept out of office by a wave of popular resentment; but in the face of the fact that approximately one-fifth of the entire population of this country now are, and long have been, paying premiums to these same companies, the disposition to indulge in undiscriminating criticism of life insurance companies in general, should have no permanent significance, but should only be regarded as a not uncommon but undesirable incident of a moral awakening, whose general trend is in the direction of wholesome reform.

In all the adverse comments that have been written and spoken during this awakening there has not been a serious impeachment of the basic principles upon which American life insurance rests, nor a single sober suggestion of doubt as to the ever-present ability, and ever-present inclination, of all reputable, honestly managed American life insurance companies to make prompt and full payment of all legitimate claims on their policies.

It must be conceded that these companies are now managed and conducted by those in whom we can have implicit trust. To recklessly or flippantly impugn the honesty or ability of their present management in wholesale fashion and in a single breath because of past individual shortcomings, is a most unjust and unpatriotic thing to do.

In the recent life insurance investigations, it was neither the principle nor the beneficence of American life insurance which was tried and found wanting; what legitimately fell under condemnation were only a few of the individual managers of the business, together with certain pernicious and

Copyright 1906 by Underwood & Underwood NY

unsafe methods and practices in which they had indulged or which they had permitted to attach to the great interests entrusted to their care.

The methods and practices in question have, for the most part, been eliminated, along with those responsible for their introduction. American life insurance has just been subjected to the most trying tests in its entire history; and as an economic system mathematically sound and of far reaching beneficence, it stands before the country in a stronger position today than ever before.

Nearly a quarter of a century ago, in a gubernatorial message to the New York Legislature, in referring to the Board of Railroad Commissioners' demand for quarterly report from railroad corporations of this State, I said: "It would, in my opinion, be a most valuable protection to the people if other large corporations were obliged to report to some department their transactions and financial condition."

Under present conditions the life insurance companies of this country are required to report their transactions and financial condition with a wealth of detail never before dreamed of. As a result of this unprecedented publicity of life insurance information, our people carrying or seeking life insurance are now in a position to know vastly more than heretofore about the operations of the companies upon which the future welfare of themselves and their families may largely depend. And I have no hesitation in saying that the 15,000,000 of our fellow citizens who carry policies with companies of approved standing may now rely, with greater confidence than ever, upon the security of life insurance protection which they maintain---often at great self denial---against a rainy day, or against the want that may threaten the loved ones who survive them.

It is, notwithstanding, a regrettable fact that there are still so many bread-winners in this country who, through carelessness, neglect or procrastination carry no life insurance for the protection of their families. With the facilities offered by sound and trustworthy American life insurance companies, I can scarcely understand how any prudent or sensible man, engaged in active work or business, and not possessing an assured income and fortune, should fail to protect himself and those dependent on him by a reasonable amount of life insurance. It seems to me that to do this is but to discharge a duty imperatively suggested by intelligent foresight and wise precaution.

Suppose there was no life insurance. What would people do who live out all they earn and only save by being insured? ---"Life Insurance Sayings"

You may not love your family, but you might be polite enough to insure for their benefit. That much you owe them. ---"Life Insurance Sayings"

...consisting of or lasting for five years. 2. : occurring or being done every five years. — quinquennial noun. — quin·quen·ni·al·ly \-nē-ə-lē\ adverb ...

page 8,


THE message to the American people on the subject of life insurance from the Hon. Grover Cleveland, the venerated ex-President of the United States, given in this Quinquennial number of The Spectator, will undoubtedly be instrumental in persuading many persons to insure their lives. Further emphasis is given to the message by the fact that the distinguished writer, although he does not mention it, is not only a believer in life insurance, but a doer. In a recent interview he said:

"When I was a young man I took out two policies for my mother. One was for $2,500 and the other for $3,000. I have held on to them all these years and am still paying premiums on them. I'm going to hold on to them. That is the thing for everybody with somebody dependent on him. Get a policy and then hold on to it. It means self respect; it means that nobody will have to put something in a hat for you or your dependent ones if you should be snatched away from them. Nobody who liked you living will be called on to do anything for you or yours with ill grace and a grudging heart."

The two policies referred to are not the only ones carried by Mr Cleveland, as, according to the information at our command, for a number of years past he has been insured for a larger amount. He believes firmly in the principle that life insurance should be maintained on a scale corresponding closely to earning power, so that when death intervenes there is no necessity for a change in the manner of the family's style of living to a lower scale. The precept urged by this eminent contributor to our columns is sound and good---his example backs that precept admirably.

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