More About Insurance

(Ed. Note--The Crimson does not necessarily endorse opinions expressed in printed communications. No attention will be paid to anonymous letters and only under special conditions, at the request of the writer will names be with-held.)

To the Editor of the CRIMSON:

The Harvard CRIMSON has shown a most fair minded attitude in the somewhat perplexing problem of raising 25th Anniversary Gifts. You have opened your columns both to the Harvard Fund Council's Plan of direct contribution and to the so called insurance Plan. I read with a great deal of interest Mr. Coolidge's very fair summary of the situation as viewed by the Harvard Fund Council. However, his summary shows beyond question of a doubt that the Council does not understand the Insurance Plan which I presented to the Officers of the class of 1931. Although the matter is probably closed for the present graduating class I do wish to clear up all errors and misunderstandings for future senior classes; therefore, I request an opportunity to lay before the undergraduate body the actual workings of the so called Insurance Plan. With this in view let me give an exact example of how the plan works out.

If a man twenty years old takes out a $1,000.00 policy he will pay an annual premium of $19.00 (he would pay this premium regardless of the disposition of his dividends). The dividends from this insurance would be paid by the Insurance Company annually to the Harvard Fund. The policy holder would be in full control of his policy and if he desired to do so he could alter the matter of the dividend payment. By notifying the company he could suspend his payments to the Fund and have his dividends revert to him in cash, or have them applied as a part payment on his premium. If he was in a position to give his dividends to the Harvard Fund throughout the whole twentyfive year period, the amount which he would have contributed to the Fund would be $437.00 (these figures are based on the present dividend scale of the Sun Assurance Company of Canada which company I recommend for the work). He would have paid out in premiums $475.00. At the end of the 25th year he could surrender his policy and receive in cash from the Company $277.00. Therefore at a net cost to him of $198.00 plus loss of interest he would have made a contribution of $437.00 to the Harvard Fund and would have had his life insured for $1,000.00 during the whole twenty-five years. In the event of his death the policy would be paid to whatever beneficiary he had elected. If the policy holder wished to regulate his policy beyond the 25th year and use the dividend himself the net cost for the 26th year for $1,000.00 protection would be $5.86, whereas the net cost of $,100.00 protection at the age of 45 would be $28.74.

The charm of the insurance plan is that it allows each man to undertake that which he feels able to do and yet involves to obligation on his part. If the plan were accepted there would be men in the class who would be interested in buying $10,000.00 insurance and who would be willing to have one-tenth of the dividends paid to the Fund. There will be men in the class who would be interested in buying a $50,000.00 policy and who would be willing to have 50 percent of the dividends paid to the class. There would be men who would have no desire for insurance and who would make their contribution when, as, and if they desired directly to the Fund.

The paramount points which the Council has not understood are, as follows:

1. The Insurance Plan imposes no obligation on any member of the class to buy insurance, but it does take into consideration that a large percentage of the class will be interested in buying insurance.

2. There is and can be no charge made by the Insurance Company or its agent for putting the plan in operation. After this point has been repeatedly misunderstood let me repeat myself. The Insurance Company and its agent do not charge one penny against the Harvard Fund, against the 25th gift, or against the individual policy holder for its services in sending dividend checks to the Harvard Fund.

3. The insurance policy is at all times in full control of the policy holder, and should he desire, the proceeds go to his beneficiary.

The Insurance Plan has no attraction to the individual member of the class who has sufficient life insurance. On the other hand, to those members of the class who are intending to insure their lives and who are intending to make a gift to the Harvard Fund the combining of the two into a single transaction becomes an ideal solution. The contributions are made with the minimum of effort on the part of the individual and the fund gains a maximum of return. It is my very real belief that the Council's opposition to the Insurance Plan has been because it has never had the insurance Plan fully explained. Yours very truly.   Douglas Lawson.