your friends and in your community. Find an agent who is well trained and knows his business one in whom you can have

confidence.

When selecting an agent, keep in mind that as a client you will deal with your agent through the years. You will want a man or woman who will become a trusted friend and adviser.

In all states, the agent must pass a written examination to qualify for a license to sell life insurance. The good agent has had further extensive education and training in life insurance, financial planning, and other subjects related to serving the needs of clients. On his own initiative, an agent will often continue his education over the years, frequently under company auspices or through his professional organization, the National Association of Life Underwriters. He may be a graduate of the two-year course offered by the Life Underwriter Training Council. He may also have received the designation of Chartered Life Underwriter, awarded by the American College of Life Underwriters following an intensive college-level course of study.

How to Select a Company

"The first thing of all in judging a life insurance company is to know the character of the men who manage it; next the safeguards of the system under which they act; and after that, the relation of its means to its liabilities. Elizur Wright — 1859.

That statement is as true today as it was over a century ago. In choosing a company, you will want to consider its reputation, both nationally and in your own community. Among other things, you may want answers to the following questions: Who are the local representatives? Are they highly regarded by your friends and neighbors? Does the company have a record of good service to policyholders in your community? Does the company's agent understand your particular problem, and has he offered you a practicable solution?

Any agent will gladly give you detailed information about the company he represents.

Another way to secure important facts about a company is to obtain from the agent or the home office a copy of the latest annual report to policyholders. Reports generally cover such subjects as the varied activities of management, the company's objectives, its prob

lems, and its accomplishments, and give a record of the company's financial results. This will help you get a picture of the company, and how it operates.

If you wish further information about a company, seek the guidance of your local banker or some prominent businessman.

The laws of the states require that any company represented by an agent within the state be licensed by that state. This is evidence that it has complied with the laws of the state designed for the protection of the policyholder; is subject to regular periodic exami- nations by the Insurance Commissioner; has filed its annual financial reports with the state; maintains required legal reserves; and has been judged as qualified to do business with the citizens of the state.

If you are in doubt as to whether a company is licensed to do business in your state, do not hesitate to write your State Insurance Department at the capital city, where information will be given you without charge regarding the companies licensed to do business in your state. Furthermore, results of the periodic examinations are on file in the State Insurance Departments and are available to anyone who seeks information.

If a company is not licensed to do business in the state, prospective purchasers of insurance should be on their guard to secure full information about the company and the exact terms of the policy offered.

What About Comparing
Policy Costs?

The most important consideration is to select the policy which best fits your needs. Buying some particular policy simply because it is cheaper than another kind of policy, regardless of needs, may prove to be uneconomical in the long run.

If you wish to make any comparison between the cost of policies in different companies, it is important to know that policy provisions are not always identical, and that such differences are likely to affect the cost of these policies.

If you compare similar policies issued by different companies, you will find some differences in cost. In the case of participating policies, your net cost for the year is the premium less the dividend. Dividends can vary from year to year because of differences in

the amount of death payments, investment results and operating expenses.

In the case of nonparticipating policies, as we have seen, the annual premium is your cost for the year and no dividends are payable.

As between similar policies issued on the participating and nonparticipating plans, there is naturally bound to be some difference in cost, one way or the other, over a period of years. However, the difference cannot be predicted. In fact, it can be measured only as a result of actual experience.

How to Obtain a Policy

A life insurance policy is issued to an individual following his application for insurance and acceptance of the application by the company. An application is sent in to a company by a life insurance agent after it is filled out by a prospective policyholder.

There are usually two parts to an application. In the first section the applicant indicates, among other things, the type of policy desired, the amount of insurance he wants, and states his occupation and the amount of insurance he now owns. In the second section the applicant gives his medical history. Here the questions are frequently asked by a doctor who examines the applicant, explains medical terms, and writes the applicant's answers. The applicant must sign both section of the application.

A medical examination is frequently required of applicants for ordinary policies (page 7). No examination is usually required in connection with group insurance.

In accordance with customary business practices, the company usually requires an inspection report on the applicant. This is needed to protect policyholders against possible fraud, by establishing such fundamental facts as (1) that there is such a person, (2) that he lives at the address given, (3) that his employment is as stated, and (4) that his reputation indicates that he is a good moral and financial risk. Naturally, this information is not sought from the applicant but from his personal and business acquaintances. A very small percentage of inspection reports reveal some fraudulent applications. Every applicant should understand that inspection reports protect him from paying part of the cost of fraudulent claims that might otherwise result.

The information contained in the application, the medical examination and the inspection report is needed by the company to see whether the applicant meets the requirements for insurability. Ninety-seven per cent of all applicants for life insurance do meet these requirements, although some may be offered policies at slightly higher rates because of physical impairments or occupational

hazards.

In ordinary policies, a photostat of the application is attached to the policy and becomes a part of the contract. Some industrial policies similarly include the application while others simply include a statement of conditions under which the company may recall the policy if the applicant has given false information of material importance.

A Final Word

on Planning Your Program

In planning your life insurance program, be sure to discuss your plans with your dependents. Husband and wife should jointly plan family insurance. Children can be brought into an understanding of life insurance at an early age.

Most families will find that they can set up only a part of their insurance program immediately. It is much better to fulfill the program step by step as your increasing income allows and as your family's needs become more apparent. In other words, buy what you can today, and cover your most important needs first.

Because the premium rates on new insurance are higher for older persons, your yearly premium outlay will be less if you buy as you go along. Then, too, your family will be protected in the meantime for at least as much of the program as you are able to provide.

There is also the question of your insurability from the health standpoint. Today you are quite likely insurable; some day you may not be able to pass the medical examination. You have no way of knowing when that day will arrive.

If you have any questions about life insurance, seek out the answers. Good sources of information are the Institute of Life Insurance, the various life insurance companies and life insurance agents. They can furnish specific facts about types of policies and how they can be tailored to fit your needs.

1. Keep your company informed of your address. This is par

ticularly important. Each year a number of policyholders move without leaving a forwarding address or notifying their insurance companies. If you are planning to be away for a few months, be sure to leave forwarding addresses so that you may continue to receive premium notices and any other important messages from your company.

2.

Read your life insurance policy. Be sure that you understand its basic provisions and benefits. When you do, you will probably get a better appreciation of the values that are in your policy and what your policy will do for you. You will learn something of its flexibility in meeting various needs and changing situations. You can avoid possible misconcep