You are reading a page from Life Insurance as a Life Work, by Hugh Hart
(1926)
Part of the American Term Life Insurance History Project
Term Life Insurance
CHAPTER X
MISUNDERSTANDINGS
Misunderstood! It is a right fool's word. Is it
so bad then to be misunderstood? Pythagoras was
misunderstood, and Socrates, and Jesus, and Luther,
and Copernicus, and Galileo, and Newton, and every
pure and wise spirit that ever took flesh. To be great
is to be misunderstood.—RALPH WALDO EMERSON.
A great deal of misinformation exists in
regard to the life insurance vocation. Per-
haps the most glaring misconception is the
idea that life insurance recruits its workers
from among the failures in other vocations.
This erroneous idea, like most of the false
impressions that exist in the world, arose
from a previous measure of truth. There
was a time when life insurance agents, as a
class, did not measure up to the high aver-
age that is coming to prevail to-day.
The fact must be kept constantly in mind
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MISUNDERSTANDINGS
that life insurance is a comparatively new
business in America and that it takes time
to establish traditions and to set up stand-
ards. Groping during the earlier decades,
the life insurance companies were alto-
gether too prone to try to get new business
through .whatever human instrumentalities
they might find available. Their operation
in that earlier period was largely a selling
process, instead of a service process, and
salesmanship, in whatever branch, was not
then the science that it has grown to be in
recent years. It has taken two thousand
years for the professions of law and medi-
cine to develop their high professional codes
and it would be unreasonable to expect the
relatively new institution of life insurance
to develop as high a code in so short a time.
The novelty of the life insurance idea
originally attracted salesmen galore of the
type that took pride in smooth-talking abil-
ity, high-pressure methods, and too often,
also, in dexterity in hoodwinking prospects.
There were, of course, men engaged in sell-
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LIFE INSURANCE AS A LIFE WORK
ing life insurance during those pioneer
years who had clean motives and proper
methods. Burke, the great English Parlia-
mentarian, truly said that you cannot indict
a nation, and neither can you indict a whole
group of men in any given line of work.
But the staunchest defenders of the old or-
der of life insurance agents cannot deny the
fact that in too large a proportion of cases
the man with the rate book had failed in his
other undertakings and had taken up life in-
surance as a last resort, or that many who
joined the ranks did so with the idea that
this was a field in which they could use un-
scrupulous methods because of the prevail-
ing public ignorance of life insurance.
These men, their characteristics and their
methods, left an unsavory impression on the
public—an impression, which, happily, is
being dissipated by the new type of life in-
surance counsellor who has come upon the
scene in recent years.
The life insurance agent of former years
knew very little about insurance. How
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MISUNDERSTANDINGS
could he ? Only in the last dozen years has
training been generally recognized as a pre-
requisite to success in selling life insur-
ance. The companies, no less than the
agencies, looked upon training as unneces-
sary, the value of which did not justify the
time and expense needed to acquire it.
New men, ignorant of the science of life
insurance, were given rate books, and
turned loose on an all too patient public.
The wonder is that these uneducated emis-
saries of the highly complicated institution
of life insurance accomplished as much as
they did, for, it must be remembered, that
they were working without training, at a
time when they actually had to convert a
skeptical public to the fact that the life in-
surance idea itself was sound. They had
to struggle under difficulties that are almost
unbelievable, in comparison with the more
favorable conditions under which the
present-day underwriter operates. Never-
theless, they laid the foundation of strength
and stability for the success of life insur-
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ance in America by inculcating the life in-
surance idea in the American mind, and by
securing the premiums from "which our
older companies have been able to grow into
the mighty financial giants which they are
to-day.
Unfortunately, the knowledge of progress
does not always travel as rapidly as progress
itself. The public, as a whole, is not en-
tirely convinced that the type of life insur-
ance agent which we have described no
longer dominates the field of life insurance
salesmanship. He is as much out of place
in the new order as the doctor whose fa-
vorite method of treating his patients was
to bleed them. I do not contend that the
former type of life underwriter or his
methods have become entirely obsolete.
Here and there we find occasional survivals
of that former type, but these, like the fos-
sils of a previous era of animal life, are evi-
dences of what was yesterday, rather than
of what is to-day. The companies and
agencies now provide training courses for
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MISUNDERSTANDINGS
their agents, which new men are not only
privileged, but required, in a growing num-
ber of cases, to take before starting out to
counsel men on the vital problem of insur-
ing their lives. Colleges and universities
are instituting departments for this same
purpose. Some of the greatest constructive
thinkers in the life insurance business, men
like Mr. Charles J. Rockwell, Director of the
School of Life Insurance Salesmanship at
the University of Pittsburgh, Doctor S. S.
Huebner, Professor of Insurance, Wharton
School of Finance and Commerce, Univer-
sity of Pennsylvania, Professor Griffin M.
Lovelace, Director of the Life Insurance
Training Course of New York University,
Doctor John A. Stevenson, Second Vice-
President of The Equitable Life Assurance
Society of the United States, Mr. Edward
A. Woods, builder of the celebrated Edward
A. Woods Agency of Pittsburgh, Vice-
President Winslow Russell of the Phoenix
Mutual Life Insurance Company, Mr. Mar-
shall Holcombe, head of the Life Insurance
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Sales Research Bureau of Hartford, Mr.
Mansur B. Oakes of the Insurance Research
& Review Service of Indianapolis, and Mr.
Abner Thorpe, Jr., of the Diamond Life
Bulletin Service of Cincinnati, are effec-
tively devoting a great deal of time and
thought to devising ways of educating the
new life insurance man for his enlarged re-
sponsibilities.
The tremendous growth of life insurance
in recent years, and the important place it
now occupies in public esteem, have served
to attract the highest grade of men to the
business. The opportunity to become pro-
ficient in this new profession, through the
training now available, has served to en-
hance the tendency on the part of men of
promise and quality to become life under-
writers. The college man, particularly, is
entering this new and uncrowded profession
with zest, bringing with him into the voca-
tion a certain charm and vision that was not
often found before.
The reference to life insurance selling as
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MISUNDERSTANDINGS
an "uncrowded" profession suggests an-
other prevalent misunderstanding regard-
ing this vocation—the belief that there are
"too many agents." Only to the extent
that life insurance men are untrained or
incompetent is this true. The men now en-
gaged in life insurance field work who are
not equipped to carry on the work properly,
and there are many such, are superfluous,
and should be eliminated; but it is easily
demonstrable that the vocation is not only
not crowded with the right calibre of men,
but that, on the contrary, an urgent need
exists for thoroughly capable field men to
carry on the work of life insurance selling.
As we have pointed out, the measure of life
insurance required by the American people,
if computed in ideal terms of life values,
approximates two trillion dollars, while the
total coverage now carried is only sixty-four
billion dollars. The wide margin between
the need and the amount supplied, consti-
tutes the most powerful answer to those who
claim that the field is crowded. Perhaps
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LIFE INSURANCE AS A LIFE WORK
more impressive evidence, however, that the
field is not crowded is the almost frantic
effort of the companies and agencies to se-
cure men of the right type. The graduat-
ing classes of our colleges and universities
are being combed for suitable agency timber
(one agency recently secured nine men from
the senior class of a large university) ; men
of strong personalities with records of
achievement behind them in other and less
promising vocations are being sought with
avidity; while advertising campaigns, in
some instances on a national scale, are be-
ing carried on for men who measure up to
the ever more rigid requirements of life in-
surance salesmanship.
Akin to the mistaken idea that the voca-
tion is crowded, is the belief that the coun-
try is adequately insured already or at least
is rapidly approaching the point of satura-
tion. The discrepancy already referred to
(see pp. 75 and 76) between the amount of
insurance carried and the human life values
in this country, refutes that misconception.
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MISUNDERSTANDINGS
Hardly a business move of consequence is
made but there is evolved at the same time a
life insurance requirement. Whether it be
a promotion, the taking on of larger re-
sponsibilities, the attainment of a bigger in-
come, the assumption of a contract or the
incurring of a debt, a life insurance need,
real, legitimate and practical, is born with
it. Men with the vision and training to ob-
serve these changes and with the ability to
point them out to those affected, are re-
quired to help prevent with life insurance
what otherwise might become distressing
economic tragedies.
If it were true, as the uninformed believe,
that life insurance is approaching the point
of saturation, this fact would be reflected in
a decreased amount of new business written
each year. In 1924 the American com-
panies wrote the largest total volume of
business that had ever been written in the
history of life insurance. Of the twenty
largest American companies, not a single
one showed a decrease in 1924 in comparison
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with the business written in 1922. On the
contrary, the percentage of increase for new
business in 1924 is irrefutable evidence of the fact
that life insurance is not on the wane.
The following table shows (without giv-
ing the names of the companies) the per-
centages of increase of new business written
in 1924 over that written in 1922, among the
twenty largest American companies:
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MISUNDERSTANDINGS
The idea sometimes crops up among the
uninformed that the life insurance sales-
man's chief function is to "convince unbe-
lievers that life insurance is a good thing."
Most modern life insurance salesmen would
refuse to waste their time in arguing that
question with an "unbeliever." There was
a time in the early days of life insurance
when this was a necessary part of an agent's
duty. But to-day, a prospect who is so ig-
norant of the fundamentals of modern civi-
lized life that he debates the soundness of
the life insurance idea is, as a rule, hardly
worth the time and trouble involved in
a discussion of the subject. Fortunately,
people of this type are encountered so rarely
that it seems strange to anyone familiar
with the business of life insurance selling
that many laymen think that convincing
unbelievers is one of our frequently re-
curring problems.
Misunderstanding as to the status of the
life insurance vocation itself is not confined
to the public, but prevails also among the
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men engaged in the business. As to
whether life insurance is a business or a
profession is a controversial question, which
possibly never will be settled. It is not,
however, an important issue. The vital
thing is for the life insurance representa-
tive to serve his clients so well that he may
remove from the public mind the misunder-
standings that have grown up about our vo-
cation, clarify the functions of life insur-
ance, and reveal the constructive good that
he and his vocation render to society. The
public, which, in the last analysis, is fair,
will, unasked, allot to the vocation of life
insurance selling whatever status its serv-
ices merit.
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