The Camden weekly journal. [volume] (Camden, South-Carolina) 1853-1861, 1854-07-11
Hlisrrllanfu1ta NruH.
what is Life Insurance.


1t is the desposit Of an annual sum with an
Insurance Company, to be accumulated at
compound interest for the benefit of ones fam
lily.
A husband, at the age of thirty, pays to the
company twenty FIVE dollars per annum, and
this amount, increased at compound interest,
Is to be paid over at his death to his wife and
children.
The payments are not, however accumula
ted for the actual period that he lives, hut for
the time That he will probable live. Of a thou
sand persons at the age of thirty, all in good
health, some will die in FIVE years, and some
in ten, twenty. thirty or forty years; and it is
possible few may survive still longer. The
average peri d that all will live may be known
from the large collections of bills ct mortality
that have been made in this country and in Eu-
rope. If that is twenty years, the amount to
be paid to the surviving family is twenty times
twenty. five dollars, or FIVE hundred dollars, to-
gether with its accumulated interest. This
$500, being deposited with the Company at
various times, twenty five dollars the first ear,
and twenty.fvesiu evnry subsequent year, the
amount which the Insurance Company will
have at interest, will be twenty five dollars at
first, and FIVE hundred at last; the average will
be $3.50. The interest on this. at six per cent.
will be SIS per annum, and for the twenty
wears. s3OO--making $500 in all, if counted at
simple interest If computed at compound in
terest the amount will be more; or if the aver
age period that man at 81 years of age may
be expected to live, is more than twenty years,
the amount will lie larger. The calculations
of the Insurance Company show, that the final
amount, after deducting tritie for expenses OF
managing and investing these sums, Is 81 1000.
They therefore agree to pay to the surviving
family of the depostor, one thousand dollars.
If his age had been thirty.one, the annual
payment, to make up the thousand dollars, is
S25.70. 1882, it is $500 And so on, in
creasing continually, as the party is older,
when he begins to make the annual deposit
If he is Younger, the yearly payment is less;
at 25, it is S2l.s0; at %, tits $40.
1t thus appears that insurng ones life is neI-
ther more or less thin making deposit to be
accumulated at compound interest, for the ben
eft of ones surviving family; the accumulation
to be calculated, not for the time the party ac-
tualIy Lives, but for the period he may be ex.
pected to live, according to the we'll established
and well understood laws of human mortality.
If he lives longer, his family is to receive no
more; if shorter, they receive no less.
Life Insurance differs then from Savings
Bank mainly in this, that in the one the depos-
its are accumulated at compound interest for
the actual time they are left in the bank; in the
other the deposits accumulate for the average
period the party may expect to live.
Each of these plans has its advantages. 1t
the party should die soon, his deposits, if made
with Life Insurance Company, will have ac-
cumulated to large sum, and if he should live
long time, the accumulation would be no
greater. If the deposit be made in Savings
Bank, the sum is small if death should occur
soon, and becomes larger and larger the longer
the party lives. :, -.
Thus the insurance of the husbands life
makes sure, certain provision for family,
whether the husband lives a short or long time;
while the Savings Bank does this only for
long life.
And so also it is, if any other use be made
of the money. If man buys land or servants,
or loans his money at interest, the accumua
tion will be less, should he die soon, than if he
had invested his means in Policy on his life.