Business Hints for Men and Women Part 26

It can be said that some of them have been and are being well managed, but others, like their predecessors, the old line companies, have unfortunately been conducted for the enrichment of their promoters.

The mutual insurance companies, like their more pretentious prototypes, are now placed under the supervision of inspectors in nearly all the states.

AMOUNTS OF POLICIES

In the society companies, there is a limit to the amount, usually $3,000, for which one can be insured, but the regular companies have no such limitation.

In the mutual insurance companies, the insured cannot leave his insurance to his creditors, or to any one not within a certain degree of kinship.

In the regular companies a man may insure for any amount he thinks he can carry, and he can insure in the same way in any number of companies, and he can leave the money to any one he may select, or for any purpose he may choose.

Sometimes the policy is made payable to unnamed executors. These may be named in a will made after he has taken out his policy.

POLICIES AS SECURITY

Sometimes a man, without real estate or other personal a.s.sets, desires to raise a loan on his life insurance, which, it should be said, is a form of personal property. In this case he may a.s.sign his life policy, or his endowment policy, as security for the loan.

Again, if he is not insured and has no shadow of an a.s.set, he may have his life insured for the benefit of another, in consideration for a loan.

LAPSES

When there is a failure to meet premiums, the policy is said to "lapse" or default.

Even in this case the insured has an equity.

Every policy, depending on the amount paid, has what is known as a "surrender value," and by proper process this may be collected from the company.

In some states, if the insured fails to meet his premiums, the company is compelled to pay on the policy at his death a sum equivalent to that which he paid before default.

Some insurance policies have a clause stating that the contract will be void in the event of the suicide of the holder. The highest courts have set this clause aside. The ruling is that a suicide is an insane man, and that his heirs should not be made to suffer for his misfortune.

PROPRIETARY AND MUTUAL COMPANIES

The larger insurance companies may be either proprietary or mutual, some are a combination of both.

The proprietary companies are corporations organized by a number of men to conduct life insurance as a business enterprise.

Such a company must be regularly chartered, and is under the supervision of the state department of insurance.

Mutual companies, as the name implies, are organized and are meant to be managed for the benefit of the policy holders, who are also regarded as stock holders, with the right to vote in the election of officers and other company affairs.

Aiming to create a strong reserve fund to secure the policy holders, the mutual life insurance companies usually charge a little more in the way of premiums.

Many rich men have their lives insured for great amounts. This is done that their heirs may not be forced to break up the estate, at death, in order to settle the ordinary liabilities.

If it can be afforded, it is always well to carry some life insurance.

CHAPTER XX

FIRE AND ACCIDENT INSURANCE

We hear and know much about life insurance because, no doubt, it has to do directly with the individual, and so has a personal appeal; but there are other forms of insurance, forms that have to do with things material, that play an important part in the world's business.

LIKE GAMBLING

The gambling spirit, like the desire for stimulants and the tobacco habit, seems to be well nigh universal.

Men bet on the turn of dice, the cutting of cards, or the tossing of a coin, and we very properly denounce it as gambling. We take money without giving an equivalent, or we part with it and have nothing to show for the transfer.

There are insurance companies in England and in other parts of Europe where they insure risks from life to fire, from ships to crops, and from the turning of a card to the tossing of a coin.

The English company, known the world over as "Lloyd's," is ready to insure an ocean liner, or to guarantee that the next child born into your family will be a boy or a girl; it will even insure that there will or will not be twins, and that, if twins, they will be boys or girls, or one of each.

Now, this looks like gambling, and you would be quite right in so cla.s.sing it, yet it is founded on the well considered law of chance, and the premiums--call them bets--are calculated with a mathematical precision surprising to one who has not studied the matter.

WHAT IS FIRE INSURANCE?

Fire insurance is a contract between the insured and the company taking the risk, in which for a consideration called a "premium,"

the company agrees to pay to the insured a stated sum, should the property, named in the policy, be destroyed by fire.

If there should be a fire, during the life of the policy, and the damage is not total, the company pays only enough to cover the loss.

Should the property be totally destroyed the company pays up to the amount named in the policy.

No company cares to insure for the full amount of the property; that might be an incentive to incendiarism.

In taking a fire risk, the companies base their estimates on tables as carefully worked out and from experiences quite as well studied as those of the actuaries of life companies.

Fire companies are purely business corporations, and their conduct is subject to the inspection of the officials of the state from which they receive their charters.

PREMIUMS

As life companies have rates dependent on the age of the insured, so fire companies regulate their premiums by the location and other circ.u.mstances of the buildings; in other words, they calculate the probabilities, and charge accordingly.

There are buildings particularly subject to combustion on which American companies will not take a risk. Among these may be cla.s.sed kerosene and turpentine stills, sulphur and powder mills, and the buildings in which these products are stored.

Buildings not used for the purposes named, but in close proximity to them, are often considered too dangerous to warrant the issuance of a policy.

In all cases, the company makes a careful survey of the property to be insured, and on this report the amount of the premium is based.

Premiums on fire policies must be paid in bulk and in advance.

Policies should be renewed some days before the expiration of the old ones.