t'lij/e Ten 



THE I. A. A. RECORD 



What You Should 



Know About Life 



Insurance Policies 



By L. A. Williams j ' 



FN ALMOST eVery household life in- 

 -■• surance is appreciated, but in the 

 main is not understood. Many peo- 

 ple can scarcely tell the name of the 

 company they, are insured in. Very 

 few know what kind of a policy they 

 have, and most everyone has questions 

 .about life insurance that he would like 

 to have answered, either about his own 

 policy, or about one which he intends 

 to buy or was thinking of buying. 

 Any of these questions will be an- 

 swered if sent in to the Life Insur- 

 ance Service, Illinois Agricultural As- 

 sociation, 608 So. Dearborn Street, 

 Chicago. 



What kind of life insurance should 

 a person carry, and how much? These 

 questions are always prominent in the 

 minds of everyone affected by life in- 

 surance. There are two kinds of life 

 insurance as far as this explanation 

 need classify them. One is old line life 

 insurance, and the other is not. The 

 old line legal reserve life insurance is 

 always secure, the rates can never be 

 raised, the values are always guaran- 

 teed. The laws of the various states 

 governing old line life insurance, pro- 

 tect tl:e policyholder, regardless of the 

 company's guarantee. The -Mutual 

 Companies, Fraternal and Assessment 

 Organizations that do not have per- 

 manence of rate and assurance of the 

 death claim, provide a very unstable 

 sort of protection. It is therefore cer- 

 tain-thai the kind of life insurance that 

 will be carried by the discriminating 

 buy^r will be old line life insurance. 



Needs Should Govern 



Next, the kind of policy that it is 

 advisable to carry is usually deter- 

 mined by the needs of the insured. 

 Where protection is ►the most impor- 

 tant issue, ordinary or straight life 

 gives the maximum of protection for 

 the minimum of cost, and has cash and 

 loan values, making it possible to bor- 

 row on the policy after the second pr 

 third year, and in the event of sur- 

 render, if there is no loan against the 

 policy, the cash value is available, so 

 that the net cost of protection is very 

 low over a period of years. This pol- 

 icy comes nearer fitting the needs of all 

 people than any other. 



1^ Next in popularity is the 20-Pay- 



i ment Life Policy. This policy costs 



f^bout $10 a thousand more than the 



straight life policy, at age 35 and pays 



j' up in 20 years, so that the insured has 

 attained a paid-up estate of the face 

 of his policy at the end of a period of 

 years, or in case he desires, he may 

 surrender the policy with a guaranteed 

 cash value at that time. 



20- Year Endowment 



The 20-year endowment policy is 

 perhaps the best known of all old line 

 life insurance policies. The name has 

 been misunderstood, ^he policy has 



^ 



UEAVE IT TO 



Put one in 



been abused and mis-quoted, but it is 

 still a good policy, and only the mis- 

 understanding individual has suffered a 

 disillusionment when he discovered 

 that the policy he called a 20-year en- 

 dowment turned out to be a 20-payment 

 life or a straight life policy instead. 

 It is practically impossible to buy a 

 20-year endowment policy for very 

 much under $40 a thousand. In some 

 companies the net cost would run a 

 little lower than $40, but any policy 

 that pays $1,000 at the end of 20 years 

 must of necessity cost very close to 

 $800 in 20 years' time at the lower 

 ages, I should say below age 40. At 

 age 50 the policy would cost approxi- 

 mately $47 a thousand net. The 20 

 year endowment policy pays the face 

 of the policy at maturity, at the end 

 of 20 years, or at death. And for 

 young people who have no one depend- 

 ent upon them, and who are interested 

 in leaving an estate, but are more in- 

 terested in acfcumulating a saving over 

 a period of years, this compulsory 

 method of saving money in a life in- 

 surance company and creating an es- 

 tate also combines itself nicely in a 

 20-year endowment policy. 



What Is Double Indemnity? 



There is a great deal of misunder- 



Driving in Front of Car 

 Entitled to Right of Way 



UNDER evidence that the auto- 

 mobile in which plaintiff was 

 riding reached an intersection 

 first, moving about .12 miles an 

 hour; that defendant approached 

 from the left at 30 to 35 miles 

 an hour, ran in front of plain- 

 tiff's machine, skidded and 

 stopped, and was, in consequence, 

 then run into by plaintiff's ma- 

 chine, which caused the plaintiff 

 to be injured; and that plaintiff's 

 machine was entitled to the right 

 of way, a verdict for the plaintiff 

 was sustained. 



standing about the Double Indemnity 

 and Total Disability Clauses. Double 

 Indemnity means that if you are killed 

 by accident, the policy carrying that 

 clause will pay twice the face of the 

 policy to the beneficiary named. Now, 

 suppose that death resulted from 

 poison. The question arises in your 

 mind at once that such a death could 

 be accidental, if it could be proven 

 that the insured did not take the poison 

 purposely. Now,'' this will be defined 

 in the Double Indemnity clause, and 

 in most cases is not covered and not 

 considered accidental death. 



Total and Permanent Disability 

 means just what it says. Disability 

 must be total and premanent within 

 the definition described in the policy. 

 The abuses of the disability clause 

 more frequently arises from unmerited 

 claims than from misunderstanding. 

 It is true that many agents sell this 

 policy for an accident policy. But the 

 60-day clause most always prevents it 

 from being of any value for ordinary 

 accidents. More common cases of dis- 

 ability claims arise from tuberculosis, 

 diabetes, and other diseases that ren- 

 der the individual totally incompetent 

 to carry on his business such as paral- 

 ysis and insanity. It is quite certain 

 that the rates on disability insurance 

 will have to be increased because most 

 companies selling this sort of insur- 

 ance have found themselves in the red 

 after a brief experience. 



Help To Policy Holders 



You have an oU policy that has a lot 

 of coupons on it, and a lot of in-be- 

 tween clauses and frills that you have 

 never fully understood. If you would 

 like an explanation of the policy, we 

 will mail you an analysis, if you will 

 go to the trouble of registering the 

 policy and mailing it to us with a 

 letter asking us to give you this anal- 

 ysis. Address your letter to the Life 

 Insurance Service of the Illinois Agri- 

 cultural Association, 608 So. Dearborn 

 Street, Chicago. 



The right amount of Life Insurance 

 for the head of a family to carry is 

 easiest arrived at by figuring all cash 

 needs that must be met immediately 

 at death such as funeral, doctor bills, 

 debts, etc. 



Then add an amount of insurance to 

 this which at a fair rate of interest 

 would provide an income from the prin- 

 cipal invested to permit the familyjto 

 carry on after the bread winner is 

 gone. The principal sum may be left 

 with the insurance company at inter- 

 est. 



The principal may then be distrib- 

 uted, after the family is raised, in a 

 monthly income to wife and daughters 

 or in any manner the insured may stip- 

 ulate in the insurance provision, f 





A regular auto insurance policy in- 

 cludes protection against fire, theft, 

 -windstorm, public liability and prop- 

 erty damage, collision. Write the 

 Illinois Agricultural Mutual Insurance 

 Co., 608 So. Dearborn St., Chicago or 

 see your County. Farm Bureau. 



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