The Wheeling daily register. [volume] (Wheeling, W. Va.) 1864-1878, 1873-02-22


less to the company, and so large on
short terms that no man but fool or q
dupe ever takes one. Why, will be
palmer by and by.
The ordinary minds commonly fails
to understand the subject | am talking
about, because the law OF human nor
ality extends over 20 many years and Is
com plicated with compound interest,"
The equities would be just the same in
kind il life were shorter and meney
Welded no interest. Hence the easiest
wsy to understand them will be to take
hypothetical law Of morality confined
TO q very small number o. years and
suppose the rate OF interest zero. Let
us for example suppo-e that life could
last at longest but tour years and that
one out OF tour vii die the first year,
one out Of three the second, one out OF
two the third and the rest 10 the fourth
year. This law OF morality il express
ed by the series IA l-3 l-2, IL. Now
il we take a mutual lite Insurance com
psny OF four members all entering In
the fret year OF age, each in-uring Tor
$1,000, the normal or natural net premi'
miums will be as follows:
lat year $3.50.
% year 1888 33
3ri year $500.
4 b year $1,000.
This increasing series OF premiums
would be Objectionable for reasons too
obvious to mention. How can we make
the premiums constant or Level? Oh
viously as much must be paid one way
as the other to meet the aggregate OF
death claims which will be "a 900 o.
the level premiums, whatever hey may
be, there will be tour paid the first year,
three the second. two the third, and
one the last, in all ten, 90 that each
must be $400, This will give the COM
pany 5000 the fret year beyond the one
death claim aud of course 1t must be
held in reserve or the future. The
three premiums paid the second year
will leave 5000 to be added to the re-
serve from the first. making it $500. The
income OF the third year will he $500,
making it necessary to take $40 from
the reserve. thus leaving it 5000, which
with the $400 received the fourth year
pay the last death claim, and would just
as we'll pay it, il the man should conti-
nue. to live, in violation OF the law A.
to the premiums and necessary res rye
from each, under this law, 1t would make
no difference whether the number en-
tering the first var were four or more.
Each living member must then have
reserve as follows at the end OF the
lst year 5000
q year $iUO
81 year 500
4th year 81 900
This is as much as to say the party
paving s40O the first year. compared
with one paying the normal premium
of $3.50 for $1,000 OF rlinsu-alct rom
the company, really insures himsrJ or
5000 and the company only insur.s him
the complimentary $500 at the normal
premium OF Ia or S20o. The mex,
year be insures himseIfs4U0 and pays the
company the normal a'e OF l-3. or 500
for carrying the complimentary risk OF
5000 The third year he nsures him
self 5000 and pays the compsny the
normal rate OF : or 1900, Tor carrying
the complimentary rl-k OF S4UO. The
last wear he inSures himself the whole
$1,000. for il there we're any number o.
living members, entered subsequently
not one OF them would have to G~ntrlo
ute dime to his claim. And let II he
observed that the reserve OF living
member never has TO be touched to pay
the claim OF q dead one This is al
WAYS made up out oi the normal lnsu-
rance premiums of himself AID the
living members that yesi, and his oDn
reserve or self insurance This Is IL
nancisI necessity O. substituting CON
slant or level premium TOR the natural
increasing premium, which admits no
reserve out OF the net premium. 1t
does not become any lees necessity II
legislation steps in and compels it
Under such statute, at any rate.
the contract naturally resolves itsel
into two things very stinct in kind,
and which cannot be conioundrd or
left mixed up, when policies OF dltler-
ent terms and condiuons are issued,
without maklns tue widest wo k with
equity, -.
Distinguishing the successive self in
surances from the lnsursncts by the
com pany, we have under the level pre-
MUM the two following series:
Self Insurance. lns by Co.