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Elements of Life Insurance

Departmental Valuations_p1
Departmental Valuations. In Making Up This Balance-sheet The Present Values Of Premiums Receivable Were Found By Computing The Pres Ent Value Of Each Premium As A Life Annuity Due, Either For Life Or A Limited Term; Then, By The Same Mortality Table And Rate Of Interest, The Net Single Premiums ...

Departmental Valuations_p2
If At Any Stage A Policy Promises A Surrender Value Or Other Benefit, Of A Value In Excess Of The Ordinary Reserve At That Time, A Special Reserve Is Charged So As To Provide For Accumulating Such Excess Guaranty. If The Gross Pre 140 Miums Are Less Than The Net, ...

Departmental Valuations_p3
Most Companies, In Placing Liens For The Reserves On Dated-back Policies, Take Obligations Either For The Last Terminal Reserve, The Present Mean Reserve Or The Next Terminal Reserve. Either Of The Last Two Methods Sets All, Or Nearly All, The Cash Premiums, Received At The Time, Free To Be Used ...

Elements Of Life Insurance
Elements Of Life Insurance. Insurance Is The Equalization Of Fortune. The Degree To Which It Accomplishes That End Is, Of Course, Limited By Its Sufficiency And The Contingencies To Which It Applies. But, By Indemnifying One Set Of Men For Their Losses Through Misfortune Out Of Funds Contributed By Them ...

Instalment And Continuous Instalment_p1
Instalment And Continuous Instalment Insurances "monthly Income" Policies And "income" Bonds. Ordinary Instalments. Another Variation From The Usual Forms Of Life Insurance, Is To Make The Proceeds Payable At Death Or On Maturity As An Endowment, Or Both, By Instalments, Payable Annually, Semi-annually, Quarterly Or Even Monthly, Instead Of By ...

Instalment And Continuous Instalment_p2
The Reversionary Annuity Has Always Been Favored By Experts In Life Insurance, But Never By The Public, Because Of The Uncertainty Whether The Beneficiary Will Survive To Realize Much, And Also Because Of The Possibility That Noth Ing At All Would Be Realized By Reason Of The Beneficiary Dying Before ...

Instalment And Continuous Instalment_p3
Add To This The Net Single Premium For An Insurance Of Twenty Instalments Certain To Obtain The Entire Net Single Premium. Continuous Instalment Provisions : Of A Much Simpler Character Is The Computation Of The Amount Of Instalment For Twenty Years Certain And For The After-lifetime Of The Beneficiary, In ...

Insurance Of Impaired Lives_p1
Insurance Of Impaired Lives. In The United States The Insurance Of Impaired Lives Was First Essayed By The Universal Life Insurance Com Pany, Chartered In New York In 1865. Of It Elizur Wright Says In His Report For 1865, As Commissioner Of Insurance : "a Part Of The Business They ...

Insurance Of Impaired Lives_p2
Another Method In Use When The Impairment Is Not Believed To Be Great Is To Issue The Policy At Participating Rates, Exactly As Applied For, But In A Special Dividend Class. Since The Prohibition Of Deferred Dividend Plans In Most States, The Plan Of "rating-up" To The Premium For A ...

Loans On Policies_p1
Loans On Policies. Before The Introduction Of Surrender Values In The States, In Cash Or Otherwise, At Least One Form Of Loan Upon The Security Of A Life Insurance Policy Was Known. It Was The "loan-note" Or "premium-note" Plan, Very Much In Vogue In The Early History Of Mutual Or ...

Loans On Policies_p2
Nevertheless, Except In The Operation Of The "loan-note" Plan (which Was Generally Discarded After The 70's Be Cause It Had Been Sold On The Representation That The Divi Dends Would Take Care Of The Notes, And This They Failed To Do, With The Result That Decreasing Insurance, The Notes Being ...

Ninth Year
Ninth Year. Dr. Cr. To Loading $4.23 By Reserve 8th Terminal $207.49 " Mortality, As Per Table.... 6.53 " Premium " Reserve 9th Terminal 238.83 " Interest (4) 4 Per Cent.... 32.91 " Dividend 5.39 " Surplus Interest (actual Rate 5 Per Cent) 2.30 " Salvage On Mortality 20 Per ...

Rate Making Endowment Insurance
Rate-making-endowment Insurance. Endowment Insurances Are Often Called Endowments, But That Name Is More Appropriately Applied To Pure En Dowments. An Endowment Insurance Is Payable To The Insured At The End Of A Fixed Period If He Survives, Or To The Beneficiary If He Dies Within The Period. It Will Readily ...

Rate Making Joint Life Insurance
Rate-making Joint-life Insurance. Life Insurance Is Sometimes Conditional Upon The Fail Ure Of Joint-lives And Becomes Payable Upon The First Death. Such Are Called Joint-life Insurances. They Are Sometimes Taken By Husband And Wife In Favor Of Each Other Or Of Their Children. At One Time Joint-life Insur Ances Of ...

Rate Making One Year Term Or_p1
Rate-making One-year Term Or Nat Ural Premium. Because Of Its Simplicity The Method Of Insuring Lives Which Naturally First Suggests Itself Is Insurance From The Date Of The Payment Of One Premium To The Date When Another Premium Becomes Due, Collecting Just Sufficient To Cover The Current Cost Of The ...

Rate Making One Year Term Or_p2
The Same Result May Be Reached Thus : The Contribution Of Each Towards The Amount Required To Pay The Total Losses Of $676,000, Is $6.76. But This Would Not Need To Be Paid Until The End Of The Year In Which Case The Premiums Of Those Who Had Died Could ...

Rate Making Preliminary Term_p1
Rate-making Preliminary Term. What Has Been Said In Previous Chapters On The Gen Eral Subject Of Rate-making Has Been Concerned With Net Premiums Only That Is, Only Premiums Which Will Be Precisely Sufficient, Interest And Mortality Being As As Sumed, To Enable The Company To Furnish The Promised Benefits. Possible ...

Rate Making Preliminary Term_p2
A Well-known American Actuary Urges A Method Of Loading Which Takes No Account Of The Incidence Of The Expense, But Charges It As A Percentage Of The Aggregate Annual Costs Of Insurance I. E., For Each Policy, Of The Net One-year Term Premium At The Attained Age For An In ...

Rate Making Preliminary Term_p3
The Justification Of This System, Which Has Been Offered, Is First, That It Provides Merely The Funds Which An Eco Nomically Conducted Company Requires In Order To Procure New Business, And, Second, That It Is A System Of Loading As Nearly Scientific As The Present Laws And Conditions Ad Mit ...

Rate Making Premiums Payable More
Rate-making Premiums Payable More Frequently Than Annually. Premiums Are Sometimes Payable More Frequently Than Once A Year; For Instance, Semi-annually, Quarterly, Bi Monthly, Monthly, Or Even Weekly. It Would Be Possible, Of Course, By Extending The Prin Ciples Already Laid Down, To Compute Net Premiums Pay Able In This Manner. ...

Rate Making Pure Endowments And_p1
Rate-making Pure Endowments And Life Annuities. It Would Be Possible Now To Pass Directly To The Single Premium Rates For Other Forms Of Insurance; But, Since, As Will Be Seen, The Method Of Computing Annual Premiums Cannot Be Explained Without First Explaining How To Com Pute Pure Endowments And Annuities, ...

Rate Making Pure Endowments And_p2
The Method Of Finding The Net Single Premium For A Life Annuity Of $i May, Then, Be Given This General Form : Multiply The Probability Of Surviving One Year By The Dis Counted Value Of $1, Due In One Year; Multiply The Prob Ability Of Surviving Two Years By The ...

Rate Making Return Premium
Rate-making-return Premium A Variation From The Usual Forms Of Life Insurance Is A Policy Which Promises The Payment Of A Sum Equal To A Part Or Of All The Premiums Paid, Together With The Face Of The Policy, At Death. Usually This Promise Is Limited To 10, 15 Or 20 ...

Rate Making Some Misconceptions And_p1
Rate-making Some Misconceptions And Myths. Premiums And Values Not Based On Expectancy: Every Now And Then Some One Conceives The Idea, Either That The Net Single Premium For A Whole Life Insurance Is Equal To The Sum Insured, Discounted For The Average Num Ber Of Years The Insured May Expect ...

Rate Making Some Misconceptions And_p2
The Expectation Of Life Is Not The Probable After-lifetime Or The Period Of Probable Life Which Fixes The Date At Which It Will Be Equally Probable, According To The Table, That A Life, Setting Out From A Certain Age, Will Have Died Or Will Have Survived. This May Be Found ...

Rate Making Term And Whole_p1
Rate-making Term And Whole Life And Limited Payment. The Very Earliest Form In Which Is Found What Is Now Known As Regular Life Insurance, That Is, Life Insurance Of A Fixed Amount And For A Fixed Premium, Is That Of Term Insurance Or Insurance For A Limited Period. For A ...

Rate Making Term And Whole_p2
As An Example Of The Manner Of Computing The Net Single Premium For Whole Life Insurance, Let Us Take 1,319 Insurances Of $1,000 Each, Age 9o, And Employ The Actu Aries' Table And 4 Per Cent. Interest. Dividing This Sum By 1,319 The Net Single Premium Is Found To Be ...

Some Features Peculiar To_p1
Some Features Peculiar To Life Insurance. The Contract Of Insurance Is Called A Policy. The Word Is From The Italian Word For Lottery Ticket. The Monetary Consideration For The Insurance Is Called A Premium, Which Word, In Latin, Means "bonus" Or "prize." The Fixing Of Rates Of Premium In All ...

Some Features Peculiar To_p2
Because Of These Peculiar Features Of Life Insurance, The Study Of The Subject Is Attended With Somewhat Greater Difficulties Than The Study Of Other Branches Of Insurance. The Same Considerations Impelled Life Insurance Compa Nies To Begin Collecting Statistics From The Outset, Which Would Enable Them To Cope Successfully With ...

Surplus How And When_p1
Surplus How And When Apportioned. There Have Been Many Different Methods Of Distributing The Surplus Earnings Of Participating Policies. A Com Mon Method In Great Britain, Where, As Has Been Said, The Loading Is Frequently Computed With A View To Re Turning Part Of It In Bonuses Or Dividends, Is ...

Surplus How And When_p2
It Was Reserved For American Companies To Revive And Establish The Name "dividend," To Reintroduce And Popu Larize The Distribution Of Surplus In Cash And To Perfect And Exemplify A Just And Equitable System Of Distribution. The Contribution Plan Became At Once Popular In The United States And Has Been ...

Surplus How Applied
Surplus How Applied. The Method Of Dealing With The Surplus Earnings Of Participating Policies Which The Founders Of The Equitable Of London Had In View, Was, As We Have Seen, To Divide The Same Among The Policyholders In Cash At Frequent In Tervals. The Method Actually Adopted By The Company, ...

Surplus Whence Derived
Surplus Whence Derived. In The Conduct Of A Life Insurance Company, Profits Or Salvages May Be Made In All Or At Least In Some Of Three Ways, Viz. : Higher Returns From Investments Than At The Rate Of Interest Assumed In Computing Net Premiums And Reserves, A Lower Amount Of ...

Surrender Values_p1
Surrender Values. Even After Level Premium Life Insurance Was Introduced It Was The General View That When One Failed To Pay The Premium His Insurance Lapsed, Precisely Like Any Other In Surance Policy Which Expires And Is Not Renewed. To The Extent That This View Obtained, Men Came To Believe ...

Surrender Values_p2
Long Before The Enactment Of The Massachusetts Non ' 11 Forfeiture Law, However, As Long Ago As 1792, A Life An Nuity Company In Philadelphia, Now Known As The Presby Terian Ministers' Fund, Organized In 1759 And Restricting Its Membership To Ministers Of That Faith, Had Allowed Surrender Values In ...

Surrender Values_p3
If The Reader Has Found It A Little Difficult To Follow The Foregoing Analysis, He May From That Fact Form Some Con Ception Of The Respect And Authority Which Elizur Wright's Great Services Had Earned For Him In Massachusetts, And Which Enabled Him To Obtain The Favorable Attention Of Legislators ...

The Elements Of Probabilities_p1
The Elements Of Probabilities. An Understanding Of The Simpler Elements Of The Science Of Probabilities Is Desirable Before Proceeding Further; For, Of Course, Life Insurance, Indeed All Insurance, Deals With Probabilities. The History Of The Science Of Probabilities Is Short. It Was Virtually Unknown To The Ancients, Although Traces Of ...

The Elements Of Probabilities_p2
Another Principle Of The Science Of Probabilities, Only Second In Importance, Then, Is That, If Out Of A Very Large Number Of Trials Under Conditions Nearly Alike, An Event Has Been Observed To Take Place A Certain Number Of Times, Then, Under Like Conditions, The Probability That It Will Occur ...

The Policy Contract_p1
The Policy Contract. The Application : The Application Or, As It Is Called In Great Britain, The Proposal Contains The Representations, Warranties, Promises, Consents And Agreements Of The Applicant For The Policy. The Statements To The Company's Medical Examiner, Signed By The Applicant, Are Also Made A Part Of His ...

The Policy Contract_p2
Place Of Payment: It Is Frequently Provided In The Policy That Both Premiums And Proceeds Of The Insurance Are Payable At The Home Office Of The Company. But There Is Also Generally A Provision That Premiums Are Payable Elsewhere To An Authorized Agent In Exchange For A Re Ceipt Signed ...

The Policy Contract_p3
Correction For Mistake In Age: An Understatement Of The Age Obviously Calls For An Adjustment Of The Amount Payable Under The Policy To The Amount Of Insurance Which The Premium Actually Paid Would Have Purchased At The Rate Of Premium At The True Age. Most Policies Have A Provision For ...

The Policy Contract_p4
The Privilege Is Usually Given To Convert Cash Dividends Into Paid-up Reversions Or Additions To The Sum Insured. To Make This Available, A Certificate Of Good Health Is Sometimes Required When The Insured Elects First To Make This Application, Which, However, Continues To Be Made Thereafter Without Requiring Further Certificates. ...

The Policy Contract_p5
Income Or Guaranteed Interest Provisions : In All Cases I56 Where, Instead Of A Lump Sum At Death Or At The Comple Tion Of The Endowment Period, An Income Is To Be Given For A Term Of Years Or For Life, And Then The Principal Sum Is To Be Paid, ...

Unearned Premium Or Re Insurance_p1
Unearned Premium Or Re-insurance Reserves. If No Interest Were Counted Upon, If Mortality Were Precisely According To The Mortality Table, And If Losses Were Payable At The Instant Of Death, A Company Which Had Insured Too,000 Lives At Age To For $1,000 Each, Just Six Months Ago, Receiving Net Premiums ...

Unearned Premium Or Re Insurance_p2
We May Now State This General Proposition : When The Net Premiums Have Been Correctly Computed And Calcula Tions Are Made On The Same Assumptions As To Interest And Mortality, As In Computing The Premiums, The "retrospec Tive" And The "prospective" Methods Will Bring Out The Same Reserve, Which Means ...

Unearned Premium Or Re Insurance_p3
When It Is Said That The Reserve Is That Sum Which, To Gether With Future Premiums, Will Enable The Company To Fulfill Its Promises, Mortality And Interest Being As As Sumed, It Can Only Be Meant That The Reserve Is The Aggre Gate Sum Which Enables The Company To Fulfill ...

Vital Statistics And Mortality_p1
Vital Statistics And Mortality Tables. Where, As In Fire Insurance, Policies Are Issued For A Year Only Or At Most For Three Or Five Years, It Is Sufficient To Know Approximately What The Average Annual Hazard Is For The Class Of Risk Covered. In Fact, Fire Insurance Companies Have Done ...

Vital Statistics And Mortality_p2
The Ideal Method Of Making A Mortality Table, If It Were Possible, Would Be To Take A Large Number Of Persons Under Observation From Their Birth And Keep Account Of The Diminution Of Their Number Each Year By Death. This Is Not Practicable, However, For It Would Not Be Possible ...

Vital Statistics And Mortality_p3
Certain Famous Population Tables, Known As English Life Tables I, Ii And Iii, Were Constructed By Dr. William Farr From British Census Statistics, And Were Published Between 1845 And 1865. A Second Table Deduced From The British Government Experience With Annuitants Appeared In 1860, And A Third In 1883. A ...