TO OUR POLICYHOLDERS "The Company, on November 25, 1918 had paid in policy claims $14,000,000 more than to the corresponding date in 1917; and claims in the ordinary department are still being received in double the normal number daily. The claims in the ordinary department are proportionately greater in number than in the industrial department. The extraordinary claim payments are due to the epidemic of influenza and have more than used up the amount tentatively set aside for the distribution of dividends in 1919. We regret to announce that the Board of Directors has been constrained to omit the usual declaration of dividends upon policies in the ordinary department. The holders of the policies issued on our non-participating plan may congratulate themselves that the low premiums charged gave them their dividends in advance." METROPOLITAN LIFE INSURANCE CO. The italics are ours. Certified letter #729726 with Return Receipt Requested, was sent to Mr. Cecil J. North, President of the Metropolitan Life Insurance Company on May 11, 1962, requesting verification of the memo entitled "TO OUR POLICYHOLDERS" which appears on the opposite page. To date, we have received no reply. Authentication had to be obtained from a Metropolitan policyholder. Relative to the memo, however, it should be noted in passing, that the Metropolitan Life Insurance Company was incorporated on May 24, 1868 (in succession to National Travelers Insurance Company) as a stock company, and they issued at this time "guaranteed cost" or nonparticipating life insurance policies of the type we recommend. The Management found, however, that they could retain complete control, absolute authority and their identical positions (at the same or increased salaries) and, at the same time, rid themselves of all personal financial responsibility. Consequently, in 1915, the stockholders sold their shares of stock, on their own terms to the policyholders of record, and thus became a mutual company, placing the burden of "net cost" squarely in the lap of those who were, and those who would be, insured in the future. It is indeed ironic that such an unqualified and unprecedented endorsement of "guaranteed cost" life insurance should emanate from one of the largest and leading mutual companies. Indeed it is rare that such an authentic bit of skeletonia should be uncloseted under any circumstances. However, in view of the many uninformed and unsophisticated insurance buyers who still believe in "so called dividends," it does seem that they should rightfully be entitled to this authoritative and entirely unsolicited point of view. When honesty, logic and equity are combined with sound mathematical procedure, the APPARENT "net cost" advantage projected by most mutual life insurance companies is exposed as an antiquated fiction. Positive proof of this and other pertinent dividend data can be obtained from "A Study of Mutual Life Insurance Dividends." |