TABLE OF CONTENTS.   VII

SURRENDER VALUES    Page 1o8

Insurance originally forfeitable. Inconsistent with fundamental idea. Old-time practice of Equitable. Use and abuse of discretion. Demand for surrender conditions in policies. In United States first reeognition, as to dividend additions. First agitation by Elizur Wright in 50's. As commissioner, urged automatic extended insurance. Massachusetts non-forfeiture by law of 1861. Wright's table of temporary insurances. Presbyterian Ministers' Fund issued non-forfeitable policies in 186. New York Life introduced paid-up surrender values in 186o. Attitude of Massachusetts companies. Early eourse of Mutual Benefit and National of Vermont. Tontine reaction. Massachusetts cash surrender law of 1880. Nature of surrender eharge. Foundation, adverse seleetion. Effect of adverse selection. Costs of insuranee. Insurance value. Perspieacity of Elizur Wright's presentations. Subsidence of tontine reaetion. Demand for surrender privileges. Adverse selection theory diseounted. The new view. Action of New York Life in 1892. Equitable's cash value policy. Mutual Life's. Nature of its excess guaranties. Excessive guaranties. Reasonable limits of same. Elizur Wright's alternative measure for surrender eharge. Three forms of values generally—of equivalent value. Automatic extension usual. Grace clauses.

LOANS ON POLICIES    Page 117

"Loan note" plan. Description. For from 25 per cent. to ;o per cent. of premium. Elizur Wright contrasts with refusal to pay surrender values. Distinction important, however. Loans often to maintain insuranee. Loans and cash values usually in company. Same circumstances caused two companies to act differently. Strong disinclination to lend. Disrepute of "loan note" plan. Loans to pay premiums only. Nearly all companies now lend. Amount loaned. "Next" terminal reserve plan explained. Special loans to pay premiums for remainder of period. Lending part of each premium. Automatic non-forfeiture by loans. Some abuses.