The Advantages of Life Insurance to Society

The many advantages discussed in the preceding pages, it is apparent, will greatly benefit the community as a whole if life insurance is widely used. Mr. Holcombe writes:

It is clear that any agency which improves the mental or moral attributes, or the material circumstances of any one of its citizens, raises the condition of the community of which he is a member, and thus benefits the state. Savings banks encourage thrift and produce accumulations which would in many cases be otherwise wasted, and thus they constitute a distinct and tangible benefit to the state. Life insurance promotes a sense of responsibility, strengthens family ties, and thus elevates the general character of the nation. It lessens those family discords which end in divorce, it checks intemperance, and often by its requirements brings a realization of the benefits of right living. . . . There can be no doubt, furthermore, that life insurance curtails the expense to the public treasury, of almshouses and police, of criminal courts and prisons, and of the various other necessary branches of the public service which have to do with the prevention and punishment of crime, and the relief of the suffering and unfortunate. ... It is certain that in many cases the proceeds of a life-insurance policy are practically all that remain at the death of the one responsible for the support of helpless dependents, and in a vast number of these cases, were it not for this aid, many persons would be forced to accept public charity.

The value of life insurance as an agency for increasing the individual's sense of responsibility, and for relieving the community of much needless expense in supporting members of destitute families, has been recognized for years by the governments of all civilized countries. As early as 1840 the state of New York enacted legislation to the general effect that any life-insurance policy taken out for the benefit of a married woman, or assigned to or held in trust for her, or which in case of her death before payment is to inure to the use of her or her husband's children, was to be free from all claims of creditors. A large number of our states have since enacted legislation substantially similar in character, the laws, however, usually providing that if the annual premium on said insurance should exceed a stipulated amount (usually $300) the excess together with interest should be available for satisfying the claims of creditors of the person paying the premium. Many foreign governments have also done everything possible to encourage the taking out of life insurance by adopting a very lenient policy of taxation, although this very commendable method of encouraging the spread of life-insurance protection has been neglected or refused by the several American commonwealths.

In conclusion, two general benefits of life insurance not yet discussed should briefly be referred to as vitally affecting the entire community. These are:

1. Through their enormous investments life-insurance companies have exerted a powerful influence in the upbuilding of the industrial life of the nation. Two hundred and fifty-nine companies, reported in the Insurance Year Book, 1913, show total admitted assets of $4,658,696,337, of which $1,617,873,512 represent investments in real-estate mortgages and $1,994,722,971 in corporate bonds and stocks. The significance of these large totals becomes apparent when it is stated that they represent the contributions over a long series of years of millions of policyholders, each of whom has contributed his little mite. The companies, in other words, have been the medium through which a vast aggregation of small sums has been devoted to the furtherance on a large scale of the nation's leading business interests. The investments of nearly two billion dollars in bonds and stocks will be found to be fairly well distributed over the principal transportation and other corporate properties of the country and represent a very substantial part of the total funds that have been necessary for their development. The $1,600,000,000 of real estate mortgages also represent investments in properties located in all parts of the country. Because of such loans, owners of real estate have been enabled to erect buildings or otherwise improve their properties. Not only have large sums been furnished for the development of cities and towns, but for many years the companies have granted loans upon western and southern farming lands, thus enabling the purchase, stocking, and cultivation of large areas.

2. By carefully restricting the admission to membership and by requiring answers to numerous questions relating to intemperate habits, the applicant's attention is forcefully directed to the close relationship between temperate living and longevity. Physical ailments are also frequently discovered for the first time as a result of the physical examinations which the companies require all applicants to undergo. The knowledge thus obtained leads to the application of remedies, and results in the conservation of the value of many lives for the benefit of the community.

The movement toward the conservation of health and life is receiving increasing attention on the part of the companies, and has been a subject for special consideration by various prominent life-insurance associations. Various companies are already pursuing a policy of disseminating advice for the treatment of various diseases and of offering periodical health examinations for the detection of ailments. While the movement is yet in its infancy the tremendous possibilities for good along this line cannot be overemphasized, and the desirability of having life-insurance companies participate actively in a comprehensive conservation movement is apparent. The possibilities along this line have ably been set forth by the Life Extension Institute, Inc. In a recent circular on "Life Extension Service for Life Insurance Companies" the promoters of this Institute show clearly the desirability of checking the life waste that is going on in our country as a result of ignorance or defiance of the simple laws of health and express their belief that by the study of problems relating to national vitality, by disseminating knowledge of personal hygiene and the science of disease prevention, and by offering and encouraging periodical health examinations to detect disease in time to check or cure it, a substantial contribution to longevity and to human happiness generally will be made".