240 INSURANCE 



the agent's purse, the company which he represents thereby becomes 

 morally responsible for the consequences. Much can be said in 

 favor of establishing legal responsibility in addition to the formal 

 policy contract in all cases where misrepresentations have been 

 made to the client. For illustrations of such misrepresentations 

 one needs only look about in any community of some size. It is 

 probably unjust to express ethical judgments regarding any great 

 number of men taken collectively, and the judgment here indicated 

 does not apply to thousands and thousands of agents. It does apply 

 to others, and a greater feeling of responsibility, leading to proper 

 official action on the part of the administrative authorities of com- 

 panies, will do much towards purging the insurance fraternity of this 

 harmful element. 



An unmistakable indication of the necessity of insisting upon the 

 better adaptation of the policy to the policy-holder is found in the 

 widespread and deep-seated demand for " cheaper insurance." 

 Inquiries among agents who keep in touch with the masses of the 

 common people elicit the reply that this demand is emphatic and 

 imperative. By cheaper insurance these people do not mean insecure 

 insurance, which is no insurance, but insurance which will afford 

 them the greatest protection at the least cost. No reference is made 

 here to so-called insurance or protection which lacks the scientific 

 foundation of all insurance. The cry for cheaper insurance, which 

 is most emphatic during periods of depression, emanates in part 

 from a reaction against the excesses of so-called investment insur- 

 ance. There exists a great demand for investment insurance, but 

 the demand for pure protection is greater and includes larger num- 

 bers of the population. There is no occasion for quarreling with 

 the man who advocates investment insurance and the man who 

 wants to buy it. Each individual may well be left to the dictates 

 of his own judgment with reference to the question. If he prefers 

 to enter into a contract with an insurance company for the care of 

 his funds, there is no reason -why he should not be permitted to do 

 so. It is essential, however, that the investment feature of insur- 

 ance should remain differentiated from the purely protective element, 

 lest the branch ruin the tree. Protection is the institution; invest- 

 ment is an incident of its administration. The incident should not 

 be permitted to obscure the institution. 



In further proof of the popular demand for cheaper insurance and 

 for insurance at retail, the marvelous growth of industrial insurance 

 and the enormous expansion of the fraternal system may be cited. 

 The industrial companies abandoned the struggle of three dogs over 

 one bone and pushed out into new fields where there w^ere many 

 bones and no dogs. Industrial insurance extended the fields of 

 protection into the ranks of the humbler but highly self-respecting 



