Officers' Insurance

[Rabble]

Galveston Daily News July 16 1876

New York, July 15

Gen. Custer with five ot his officers, were insured as follows: Gen.Custer, $5000;
Capt.Yates, $5000;
Capt.Keogh. $10,000;
Lieut.Calhoun, $5OOO;
Lieut.Crittenden $1O.OOO;
and Lieut.Porter, $5O0O;
in all $40,000.
As the insurances were effected under a special provision made by the companies, there will be trouble about a prompt settlement, notwithstanding they were killed in battle with the
Indians,

Ron

[harpskiddie]

Ron:

Should that not be"there will be NO [or maybe LITTLE] trouble about a prompt settlement?"

Gordie
MC

[Melani]

I first encountered the insurance policies when googling Keogh--found it on an insurance company website/chat forum. The agents discussing it were somewhat taken aback--one of them said, "There must not have been a war clause!" I would be very interested to find out if that was a common practice at the time--was the guy who sold the policies selling special "soldier's insurance?"

[harpskiddie]

Acts of War, Insurrection, and Riot [and sometimes God] are/were customarily excluded in life and health insurance policies. As Ron's posting stated, these policies had special provisions which undoubtedly overrode the customary exclusions. They may have been a special form for soldiers. In either case, they would have had either additional or special premium rates to allow the additional risk to be covered.

If I remember correctly, the issuing company was New York Life. Whatever it was, I expect that the agent who sold these policies did not have a very bright future with the company. I'm wondering which of the surviving officers had also purchased a policy, and what the premiums were.

Gordie
MC

[Rabble]

Hi Harpskiddie
the article is reproduced exactly as was printed. I also read it a couple of times as I thought that it was wrong!

Ron

[Rabble]

I knew that somewhere I had more information regarding the Insurance Policies. I have no idea now where this information came from (very seniors moment). However, to whoever did the original search, thank you. (Maybe Research Review or Greasy Grass, Diane?)

Ron

"Quote"
Custer's Insurance Policy


While reading some publications about General Custer, I ran across a short article that mentioned the insurance policies that had been written on Custer and five of his fellow officers. The policies were written by a Mr. I. F. A. Studdart of St. Paul Minnesota. Apparently Mr. Studdart was an insurance agent for New York Life Insurance Company, and covered the northern middle western states.

Custer's policy was written on June 4, 1874 at age 34, with his wife as beneficiary. The policy was for $5000.

Lt. James Calhoun's policy was written on 1 June 1874 at age 29, with his wife as beneficiary- $5000.

Capt. George Yates's policy was written on 19 July 1874 at age 33, with his wife as beneficiary- $5000.

Lt. John Crittenden's policy was written on May 12, 1876 at age 25, with his mother as the beneficiary- $10,000. he must have been single at the time and obviously wanted his mother to be well cared for if he had an untimely death.

Capt. Myles Keogh's policy was written on June 13, 1873 at age 31, with "himself" as the benefactor- $10,000. I seem to have read somewhere that Keogh's policy(and perhaps that of Crittenden) was perhaps of the same face value of the others with the exception of a double indemnity clause for accidental death. One can only guess that Keogh was having fun by listing himself as the beneficiary.

I would assume that New York Life statistics indicated that Army officers on the frontier were a good insurance risk. That these policies were all paid off, would suggest that the policies did not contain a "war clause," as many insurance policies do today. with the war clause, the policy is voided if the insured dies as the result of an act of war.

Addendum(5 May 96):

A brief note by Mr. Bruce R. Liddic in the LBHA Newsletter, Vol. III No. 2b, Summer, 1969 sheds further light on the above. The Custer's premium for the policy was $25.56 per thousand, or $127.80 annually. He states that there was an extra premium of 5% charged for war risk. If this added payment was not met by the holder's death, it was deducted from the value of the policy. This may be part of the reason that Mrs. Custer did not get all of the benefit. As I stated above, Capt. Keogh named himself as the beneficiary. In reality, he next named his friend Lt. Henry J. Nowland who received $1000 and his sister who was still in Ireland, who received $9000. This still does not answer the double indemnity question.

Addendum (June,1996) from M. Greene: As a member of New York Life, I can only tell you what I know through our own brochures. Though the policy on his life was for $5000, the check made out to his wife is clearly for $4750.00. We have surmised that there must have been a $250 loan against his policy. I don't know how it was then, but in modern times, that could have been by the policy holder's request for a cash loan, or an automatic loan if the premium wasn't paid. (You can only do that once a policy has built up cash value.)

"unquote"

[harpskiddie]

I recall going through this exercise somewhere before. The 5% extra premium is undoubtedly the reason for the less-than-face-value payment to Mrs. Custer. Death in battle would normally not be considered "accidental death" - the double indemnity provisions are actually called Accidental Death and Dismemberment, and contain a schedule for loss of one eye, both eyes, one arm, both arms, etc. etc.

A whole life policy with an annual premium of $127.80 annually would not build up any cash value until probably year three [after three premium payments] and then it would be minimal, not enough to cover an annual premium. There has been speculation that Custer was $250.00 behind in his premiums. Had that been the case, the policy would have lapsed. Had it been a term policy [the premium would seem to preclude that], there would have been no cash value, and non-payment would have caused the policy to lapse. Normal "grace" period for payment is thirty days after due.

When Keogh named the beneficiary as "himself" he was effectively naming his estate. Later he could have altered the nomination as he saw fit [which you cannot do, necessarily, if you name a person].

Gordie
MC

[Rabble]

Hi once again Harpskiddie.
I have finally got my three year old grandson's sticky fingers from the computer and found where the original information came from.
The original ISP had been changed and is now
www.garryowen.com
The is a lot of other information on the site.
Ron

[Melani]

Well, none of them died by accident--the Indians did it on purpose!

[elisabeth]

According to the July 15th 1876 letter written by Nowlan to Keogh's sister Margaret (the one who got the $9,000), Studdart was a friend of Keogh's. Not that he didn't have civilian friends, of course, but the likelihood must be that Studdart was ex-army -- in which case, he may have been especially willing to write policies that would cover death in battle?*

There's a letter from Sherman to Libbie, January 24th 1889, apparently claiming that even at that late date the Indian conflicts still weren't officially regarded as wars: "Congress may enact, people may ignore, but I say that Indian wars are as much wars as conflicts with foreigners or our own people". (Cyclorama of General Custer's Last Fight, ed. John M. Carroll, p. 57.) Could that have been a handy little get-out, even if there was a war clause in the policies? If these are undeclared and unofficial wars, not officially designated as such, it could be argued that the war clause could not apply, and the situation would be much the same as if the policy-holder had been the victim of murder.


*Can find no mention of him in Heitman, however, so maybe not.

[Diane Merkel]

rabble said:

I knew that somewhere I had more information regarding the Insurance Policies. I have no idea now where this information came from (very seniors moment). However, to whoever did the original search, thank you. (Maybe Research Review or Greasy Grass, Diane?)

I believe Bruce Liddic, or someone in the insurance business, was able to get New York Life to make facsimilies of GAC's policy, and they were distributed at one of the LBHA conferences.

Chuck is out of town, but I'll ask him when he calls tomorrow night. Perhaps I can scan it and put a copy of it on the website.

The GarryOwen site doesn't have individual page numbers for its sections, so select "Custer Topics" (and the music will stop, thank goodness!) and then you'll see "A bad day for New York Life Insurance Company."

[Diane Merkel]

Scout found this in an old Billings Gazette:

[elisabeth]

Nice.

The emphasis on "prompt payments" in the ad (never trust anything a copywriter says!) raises the question: were they prompt? Leckie's book says that the widows got their insurance payouts in November 1876. That would be reasonably swift by today's bureaucratic standards, I suppose. But was it common in the 1870s to make people wait so long? This was a comparatively new industry, really, thus needed a good public image; and this must have been the highest-profile case yet handled (unless Abraham Lincoln carried life insurance). Five months seems a long time to spend shuffling paperwork.

Has Liddic, or anyone, gone through the company's archives at all -- correspondence files, internal memos, and the like? It would be fascinating to know if the Galveston paper's prediction was not a misprint, and if there was dispute about the payments. Also, to know how long poor hapless Studdart kept his job ...

[harpskiddie]

At one of the Life Insurance Companies I worked at, I was the Supervisor of Policyowners Service, which entailed virtually everything that happened to a policy after it was issued, except for premium payments and changes of address. There were, of course, rather strict procedures for the payment of death claims, including proper proofs of death, although my General Manager once criticized me for delaying payment on one claim, because I was waiting for the results of an inquest to declare the insured actually dead and by misadventure [there was no body or death certificate - just an empty boat on a lake] saying "We are in the business of paying claims, not denying or delaying them. This man is obviously drowned in an accident. Pay the claim."

In the case of these officers, I'm wondering what was proffered as proof of death. Were there actual death certificates signed by Porter or Paulding or whoever, or affidavits signed by brother officers? Does anyone know?

Gordie
MC
former almost-bureaucrat

PS Those adverts come up for auction on Ebay from time to time

[elisabeth]

My goodness, good question. And what luck that the likes of Harrington, Porter and young Sturgis don't appear to have had any life insurance. The absence of a body would have caused ferocious problems.

Wish we had your General Manager over here. My late parents had a friend who was in the insurance business; from time to time he would sink into a deep depression, unable to sleep or eat etc. ... and his wife would explain in hushed tones, "he's had A Claim". The guiding principle here seems to be to avoid paying whenever possible.

Again, those files would be great to go into. Presumably the proof-of-death info must be there ...