War Clauses

U.S. life insurance firms, their best crop of prospects now earmarked for military service, last week broke out in a rash of war-risk clauses in all new policies. Anything but uniform, the clauses all produced the same net result: no payment for death due to war. (Policies already in force are of course not affected.) War-risk clause extremes :

> Most liberal (written by Metropolitan Life and others) covers death not due to acts of war, even if it occurs while the insured is in the armed forces and outside the U.S. Beneficiary of a soldier who dies in an auto accident in Manila can collect.

> Most drastic (written by Northwestern Mutual Life and others) will not insure any male classified as 1-A by his draft board, will not consider writing a policy unless and until actual deferment has been granted.

No companies are anxious for soldier-&-sailor business (World War I battle mortality was 53 per 1,000 per year, normal is only 7 per 1,000). They discourage all such applicants, suggest they let the U.S. insure them. The U.S. will. During World War I, the Government wrote $40 billion of life insurance on its armed forces, of which 605,716 policies with a face value of $2,565,000,000 (converted from term insurance) were still in force last year. Since passage of the National Service Life Insurance Act last year, the Veterans Administration has written around 600,000 new policies of over $2,000,000,000, now expects a big increase. Servicemen can buy up to $10,000 insurance, which covers death in battle, as well as from other causes, at rates ranging from 64-c- monthly per $1,000 at 18 years to $3.97 at 65.

This rate, based on ordinary actuarial tables, contains no allowance for battle losses--is, in short, subsidized by the taxpayer. On its World War I policies, the Government's net loss (up to June 1920) was about $900,000,000.

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