Page:American Journal of Sociology Volume 15.djvu/512

 498 THE AMERICAN JOURNAL OF SOCIOLOGY

provides for $500 of insurance in connection with the annuity, and with premiums payable quarterly, semiannually, or annually.

There is one peculiarity about these industrial contracts which is quite the reverse of what might naturally be expected and that is, that although the premiums are payable weekly like all other industrial premiums and that there is $100 of insurance tied up with the annuities, the premium rates are actually less than those charged by one of the largest companies transacting ordinary business for similar annuities without any insurance.

For instance, at age 35 the weekly premium of the Metro- politan for either a man or woman is 27 cents weekly, which is $14.04 yearly, while the ordinary company alluded to charges an annual premium of $14.80 at age 35 for an annuity of $100 deferred 35 years on the life of a male and $15.80 on the life of a female. Moreover, the Metropolitan guarantees cash values on both the annuity and insurance, while the other company does not grant any cash surrender values but only paid-up annuities for proportionate parts in the event of lapse.

These cash values are not nominal but really substantial sums. For instance, the cash value at the end of ten years in the illustra- tion cited above would be $91, which is equal to about 6^ years' premiums, while at the end of 20 years the cash value would be $252, which would be almost equal to the total premiums paid in that time. These cash values are paid even though they exceed the amount insured, and in the event of death if there is any excess of cash value, over the face of the policy, it is paid just the same as if application were made for the cash value while the insured were living. Even in contracts which provide for $500 insurance with premiums payable the same as in companies transacting ordinary insurance the cash values in the later years exceed the amount insured by a very substantial sum.

This plan of making provision for old age seems to be within the reach of all wage-earners and no doubt will be availed of by them when the plan is better known. In order to get a better understanding of what this really means, it will be of some help to compare it with a plan recently adopted by the Dominion of Canada. Under the Dominion scheme there are two plans, A