As was well said by a contributor in your last number, assessment insurance has its defects, and these are well known to the managers of these institutions, and that great improvements have been made by the National Convention of assessment companies, which is composed of representatives from the best companies organized in almost every state.  They recognize existing defects, they point out the remedies, and yet, but few seem to have the courage of their convictions.  It is a fact beyond dispute, that with perhaps a half-dozen exceptions, the rates of assessment in every assessment company in the country remain constant as at the age of entry.  That is to say, a man entering at the age of forty, pays the rate at forty only, as long as he remains a member.  This is a direct violation of the inexorable law of nature which says, that as a man grows older the risk of dying, or in other words the cost of insurance, increases.  It is all nonsense to urge that the average age and the average cost will be kept down by the influx of new members.  The contract is made with the individual, and unless each person pays enough to compensate the company for the indemnity or insurance furnished to him, it follows of necessity, that others will be overcharged in order to meet the deficiency so occasioned.  And this evil is intensified each year as the company grows older.  When younger and fresher men find that they are overcharged in order to meet deficiencies arising from the act that older and inferior risks pay less than cost, they will either not enter, or, if members, will speedily desert and join an institution which is on a sounder and more equitable basis.  No institution can be permanently successful which does not observe equity.  I have no hesitation in saying that every assessment or corporation company which violates this fundamental law of nature by not making its rates of assessment increase with the age of the individuals insured, is doomed, and that disaster and wreck is only a question of time.  This is not a new opinion.  It’s truth is attested by more than one wreck in this country already.

In every level, or uniform premium, there is a provision for the payment to the company of the rate of insurance at the actual present age, (no matter at what age the insurance was affected) on the net amount at risk.

The great danger for co-oporative or assessment companies lies in the facility with which such institutions may be organized, and by men without capital, character, experience or financial ability, who may thus be ushered into corporate existence by the indulgent laws of different states.

The members of the National Association of assessment companies should see to it that the laws of the different states should be so amended as to require at least a small capital, say $25,000, as a guaranty of good faith and ability on the part of the promoters, and that no company should be admitted to membership unless its system was founded on sound principles as demonstrated by science and business experience.