Modern insurance is one of the cheapest things a dollar will buy, also
one of the most systematic methods of saving. It is a social device,
based on statistics, which distributes individual risk of death or
poverty to all those insured. Also, an insurance policy is a liquid
asset that has a substantial cash value after a few years. Is not
an expense, since it sells for cost-plus, the latter representing a
necessary expense, as regulated by law. Few businesses are nowadays so
closely regulated in the public interest as insurance, for insurance
companies are strictly controlled by detailed laws, and the person
interested in saving assumes no risk when he buys insurance from a
recognized company. All our nationally known companies are thoroughly
reliable, their rates fair, and what they sell fairly well standardized
and without “catches” or “jokers.”
Life insurance offers methods of saving for working people.
More insurance on this straight life plan is issued than on all other
plans put together, and more purposes than are often considered by
those outside insurance work. The young man dependent upon current
earnings takes a straight life insurance on which he pays a yearly
premium of a comparatively small sum, and on which no money is paid by
the company except at his death, when his wife or whomever he assigns
it to receives it all.
There are those who believe it is the cheapest and best form of
systematic saving there is. The insurance on this ordinary life
policy will be paid in a single sum, or if you so direct it will be
paid as an income, monthly, quarterly, half-yearly or yearly to your
heirs or “beneficiary.” Women often know little about the value of a
large sum of money, and they seldom know anything about investments.
So if a policy is paid in a single sum there is great danger that
the money will be lost through unwise investment or possibly through
extravagance. There are ghouls who prey upon women who have just
secured insurance money. But if the policy is paid in installments a
steady income is supplied which cannot be lost.
The income may run during a term of years or throughout the entire
lifetime of the beneficiary.
But that is only part of the protection of a straight life insurance
policy. At slight additional cost you may have a provision in the
policy under which, if you become totally and permanently disabled
before you reach the age of sixty, a life-long monthly income,
beginning immediately, and increasing fifty percent at the end of the
first five disability years, and an additional fifty percent at the end
of the second five disability years, will be paid you; and in the
future all deposit or premiums will be canceled. This gives protection
against poverty from any physical disaster.
The parents who are concerned as to the cost of a college education for
their boy or girl may take out a twenty-year endowment policy requiring
an annual payment of a proportionately larger sum, the whole of the
amount of the insurance being received at the end of twenty years.
An endowment policy is also an ideal policy for those desiring to save
systematically and regularly so they may enjoy the fruits of their
savings after they reach the age of sixty or sixty-five. For example,
if a man of forty were to take this policy and choose sixty for the age
for payment of the endowment sum and for the beginning of his life-long
income he would make his premium deposit annually or quarterly as he
might desire until he reached the sixty-year age. He would then receive
a cash payment of the endowment sum, and beginning one month later
would receive a monthly income as long as he lived. Such a policy
participates in the annual distribution of the company’s surplus. This
participation materially increases the endowment and insurance value if
thus applied.
These are but two examples of the many policies issued by the various
companies. All policies issued by recognized companies are excellent
investments. Those interested in saving would do well to talk over
the possibilities of insurance as a saving medium with an insurance
salesman, as they nowadays have well equipped services for advising
individuals concerning their particular saving situation.
An interesting method of using insurance as a saving plan for specific
children, is for a mother or father to insure himself or herself each
time a child is born, for a specific sum--$1000, $2000 or upward. By
the time the child is grown, the 20 year endowment policy will have run
out and a sum be ready for a college education.