220 BUSINESS OF LIFE INSURANCE

l\rere this scheme otherwise fair, i. e., were the charge the exact amount of the reserve, the interest the rate used in computing reserves and the illustration based on thirteen years' accumulation, still it would not be advantageous to the insured, who would be getting no better bargain than by the usual forms. The larger charge than the reserve enables the company to use the next two or three annual premiums for expenses and current claims, thus really reducing the accumulation term to eleven or even to ten years; the higher interest charged is by so much to the insured's disadvantage, and the use of these estimates or illustrations is a fraud of itself.

The scheme was earliest employed in transfer-ring the members of a reorganised society from the assessment plan to level premium plans. By means of it the management succeeded in getting nearly all the accumulations of the assessment policies, plus the first two or three years' premiums on the substituted policies, as paid, into the surplus account and available for expenses, remuneration of officers, etc.

It proved so delusive and so attractive a dodge that it was taken up by several other concerns, for the most part with headquarters in Indiana, and has been employed freely to secure new applications for insurance. The following, much resembling the stories of discretionary