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.