NON-FORFEITURE LAWS. Down to the middle of the last century a policy-holder who allowed his policy to lapse forfeited both surplus and reserve. At that time most of the insurance was term or straight life insuranee, and the question of re serve was comparatively unimportant. and not at all understood by the insuring public. It was in the ease of limited-payment policies and en dowment policies that the policy-holders came to see clearly that they had rights in the matter. If ten or twenty annual payments are to be enough to enable an insurance company not only to grant insurance during the ten or twenty years, but also to give paid-lip insurance for life or to pay an endowment at the end of the period. evidently ashen one-half the payments have been made the insured has purchased some part of his endow ment or paid-up insurance. In the last half of the century both legislation and competition worked in favor of the lapsing poliey-holder. Legislation has secured him a large part of his reserve, while the voluntary action of the com panies secures him at least a part of the surplus.
The tirst legislative recognition of the right of the insured to the reserve on his own policy was the law passed by the Massachusetts Legislature in 18fi1. This law made it obligatory for insur ance companies to pay to a policy-holder whose policy lapsed 80 per cent. of the reserve on his own policy. California. Maine. Michigan, Mis souri, New Jersey, and New York have since passed similar non-forfeiture laws. Massachu setts and Missouri exempt from the operation of the non-fo•feiture law those policies which are allowed to lapse before two annual payments have been made; in the other States the law does not apply unless three premiums have been paid. .Non-forfeiture bills have been introduced in ninny other States and failed to pass. They have now become unimportant, since the companies voluntarily offer as good terms as legislation would he apt to secure.