Fraternity-Testvériség, 1948 (26. évfolyam, 1-12. szám)
1948-12-01 / 12. szám
4 TESTVÉRISÉG FRATERNAL VS. COMMERCIAL LIFE INSURANCE From a Lecture held by LUKE HART Before the St. Louis Chapter of the Missouri Fraternal Congress As I view it, it is not possible to make an exact comparison between the advantages of fraternal insurance and commercial life insurance. When this question first suggests itself, the natural impulse is to measure the advantages from a dollar and cents standpoint, but no one who has any understanding of the fraternal system can fail to give consideration to the many advantages which are incident to fraternal insurance and for which commercial insurance holds no parallel. The first life insurance organization in America was set up in Philadelphia in 1759 for the relief of Presbyterian ministers, their wives and children; and the first company to attempt a general insurance business was organized in that city in 1796. However, the real beginning of modern life insurance in the U. S. dates from the organization of the Mutual Life Insurance Company in New York in 1853. This was quickly followed by others and the success of these new companies led to the general multiplication of such companies. The business has continued to expand until the enormous sums now invested in life insurance in America far exceeds those of other countries. The foundation of the fraternal system was the love of men and women for their families and those who are dependent upon them, and because of this they associated the principles of life insurance with the lodge system. It had its beginning with the desire to provide immediate aid for distressed wives and children who, in the hour of their bereavement, were deprived of their bread-winner and the heads of their families. Although there were fraternities at earlier dates, it is generally recognized that the first notable example of the combining of the fraternal system with life insurance was found in the organization of the Ancient Order of United Workmen in October, 1868. The idea had a tremendous appeal as evidenced by the fact that within six months from the time the first field organizer for that society arrived in Pittsburgh as a total stranger he had organized twenty-two subordinate lodges in that vicinity. In 1886, when the Fraternal Congress was organized, there were 51 fraternal benefit societies in existence, and during the score of years from 1875 to 1895, fraternal societies swept across the continent and became implanted in the lives of the people. In the beginning, the societies were organized along unscientific lines and the revenues were uncertain. Many of them were established upon the basis of a uniform contribution from each member to meet benefit claims as they arose. This left no provision for the future, upon the assumption that there would always be members enough who would be willing to meet demands upon call. Also, in the beginning, there was no such thing as a designated beneficiary and upon the death of a member the death benefit became payable to the next of kin, with frequent conflicting claims by surviving relatives as to who was in fact the next of kin. Scientific Standards Adopted However, with the growth and development of the system, scientific standards were adopted. The societies began to require a closer medical inspection and contributions graded according to the member’s age, and the practice of making specific designation of beneficiaries was evolved. In time rates were adjusted to provide income for both current needs and for a reserve accumulation to meet future obligations. During this testing period many societies failed, but during this same period hundreds of commercial life insurance companies also disappeared. But the stamina of the fraternal system was demonstrated during this readjustment period and probably more particularly during the depression that followed the first World War. During that period, many of the commercial life insurance companies failed, in
