se of which
the policy-holders are robbed, but I defer the consideration of that
topic for that of changing policies, to which more pressing interest
attaches.

When a life policy has run for a certain number of years, and the
company has received upon the policy a large number of premiums, it is
obliged, both by prudential reasons and by law, to hold against the
liability upon it a certain sum of money. This sum is called the
reserve. It is also called the reinsurance fund. It is in fact the sum
which the company has been improving at compound interest against the
day when the policy must be paid. If for any reason the policy
lapses--say for non-payment of premium--this sum becomes the property of
the company. No policy-holder knows what the reserve on his policy is,
and the company will not tell him. It is one of those interesting facts
which you are not expected to ask questions about. It requires a
complicated calculation to arrive at it. The officers tell you so. The
fact is that every company has a book of tables which will tell you the
reserve at any moment, and the policy register should show the reserve
returned to the department the previous January. It will be seen that if
the company can induce the policy-holder to sell his policy to them for
a sum less than the reserve, it makes the difference in profit. This is
what is known as freezing out. This is open, notorious, bold robbery.
But there is a secret method which accomplishes the same result. This is
known as changing. If the company is not ready to incur the odium of
attempting to purchase its policies, it sends accomplished agents to
persuade its policy-holders that some new form of policy is more
desirable than the old. Hence the numerous plans of insurance. In the
change, it is safe to say that the reserve on the old policy is pretty
well used up, and out of it the agent takes a slice, and a pretty good
slice, and who takes the rest of it is no mystery. Every policy-holder
in a life insurance company who is asked to surrender his policy and
take money for it, or another policy, may rest assured that there is a
fraud at the bottom of the transaction, and that whoever will make money
by it, he will not. In the reinsurance of companies, and the consequent
changes of policies from one company to another, this has been the
method by which the promoters of the scheme have realized large amounts
of money.

Leaving the fertile subject of changing policies,