For the last thirty-five years a constant warfare has waged in the United States between the good and the bad in life insurance. On one side have ranged honesty, economy, and fair and liberal treatment of the insured; on the other, dishonesty, extravagance, and absolute disregard of policy-holders' rights. Certain companies have treated life insurance as a great beneficent institution, organized for the purpose of protecting the weak and the dependent against adverse fortune; others have regarded it largely as a convenient contrivance for enriching the few men who happened to have usurped control.
In this thirty-five years the history of American life insurance has been one of progressive degeneration. The people have forgotten the old ideals; have persistently abandoned good life insurance and taken up with bad. They have for the larger part ignored the teachings of our great American leaders—men like Elizur Wright, of Massachusetts, the originator of nearly everything that is best in the American system, Jacob L. Greene, of Hartford; and Amzi Dodd, of New Jersey, and have sought the leadership of men who have degraded the whole institution. They have thus displaced the United States from the world leadership in life insurance which it formerly held, and have made what was one of our greatest claims to national distinction the cause of what is, in many ways, our most shameful national scandal.
To show this deterioration in quality we need not necessarily look far. The most popular companies, indeed, have largely ceased to do a life-insurance business at all. If you study the literature they circulate, you will find the life-insurance feature of their contract only incidentally mentioned. They talk little about protection of one's family, but much about savings banks, investments, guaranteed incomes, five per cent Consols, and gold bonds. They ask you to buy their policies, not that thereby you may provide financial protection for your dependents, but that you may thereby reap financial advantage yourself. They appeal, not to your sense of responsibility, but to your cupidity. They preach life insurance, not as a boon to the poor and the defenceless, but to the fortunate and the rich. In a word, they have grafted upon tho simple life insurance idea endless investment and gambling schemes, most of which are fallacies and some of which are palpable frauds. Consequently hundreds of thousands profit little, or not at all, from the insurance feature of their contracts. In the majority of cases they ignore it entirely. The real situation was eloquently summed up at the recent New York life-insurance investigation. It then appeared that at least one-third of the insured abandoned their policies, at great loss to themselves, after they had been in force for one or two years. Of those that are left two-thirds, at particular periods, surrender them, taking in exchange certain so-called "cash profits," thus leaving their families unprovided for. In other words, out of every hundred only about twenty have entered the company for the insurance protection; or, if they have, have not yielded to the temptation of a cash reward and abandoned it.