The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1876-11-10

ion to be paid the company for assurance
, the premium; theNhance Of death or
lie in any given years to the person
,hose life Ia assured Is the risk" An ex-
,lapatlon Is also given Of the different
,inds Of life assurance companies pro
,rietary, mutual and mutual and mixed
nd tbe essential characteristcs oil each
=, uointed out. A proprietary, or. stock
,ompany, is one formed OF number OF
who subscribe capital land
hus become proprietors) adequate TO pay
expenses and cover the contingency Of
,arly losses before the premiums have
efficiently accumulated. 1t is organized
or dealing in life contingencies, as other
mercantile companies are for trading In
goods. Policy holders have no voice In
he management and do not participate
Ia the profits which may accrue. i
A mutual company is an association oil
each Of whom is an assurer, and
il at the same time himself assured.
policy.holders exercise control through
their votes for managers, and arc entitled
to all tho profits or dividends Of the com:
papy. 4 mixed company is one formed
upon combination Of the principles oil
the proprietary and the mutual compa'
MES, 4 cash capital is raised by mum.
Der Of subscribers, who agree to assume
responsibility for the frst expenses and
early losses, and at certain. intervals to
divide among the assured a part Of the
accumulated profits. The principal kinds
of policies issued are whole life, endow-
ment, endowment assurance, term, joint
life, annuity and suryivorship annuity.
The distinctive features OF each kind are
clearly set forth, and party desiring to
be assured might sayo himself some trou-
bic by consulting these definitions before
entering into contract. .,
The method Of calculating the premium
is an interesting feature Of life assurance.
There are two standard mortality tables
in the United States, compi led from the
records OF a large number Of companies,
and the vital statistics gathered by yari-
ous scientific associations, and from these
the assurance companies figure out the
amour. that must be paid by the assured
in order to enable the company to meet
It's engagements and to earn reasonable
profits. When man in ordinary good
health presents himself for assurance the
first inquiry is as to his age. II he Is In
his iortieth year the mortality table
shows that Of rs, LOG persons OF that age
alive at the beginning Of the preceding
year 765 died during the succeeding
twelve mouths--that is, every person aged
forty years has ninety.eight chances out
Of ten thousand Of lying before he arrives
at the age Of forty.one. BE has about nine
ty.nine chances in ten thousand OF dy.
ing before he reaches forty-two. Ac.
coPdipg to the tables, "the expectation OF
life" to a man of forty years extends over
the period OF twenty.soven years and one
month-that is, the individual belongs &c
a class that attains the age Of sixty.scven
barring the ninety-eight chances in Ter
thousand Of dying during the first year
with a constantly increasing ratio on the
mortality aide to the end. The premium
is rated so as to provide for the paymen
OF the principal to ninety-eight out 0
every ten thousand persons assured 70
the age Of forty and to pay the survivor
when they arrive at sixty.seven, beyont
which the expectation Of life does no
reach, although they may live to be cen
tenarians. Prudent assurance companie
must deal with them as II they were fore
ordained to die at sixty.seven. Ever,
day they survive beyond this adds to tn
net gains ofthe company.
In fixing life assurance premiums du
regard must also be had to the prevailin
rate Of interest. The money paid in b.
the policy holders becomes the capital o
the assurance companies, and it is frou
the earnings Of this capital that the loSse
must be paid. In some States the lega
rate Of interest is six per cent, and i
others as high as ten per cent. Mutua
. assurance have settled down upon lou
, per cent az the annual return for thei
D investments, and their premiums are cal
I culated on this basis. Stock companie
generally expect larger earnings. Tn
amount ascertained by actual caIculatio
!, to be necessary to meet losses Ia Gale
l the net premium; but to this Is added ar
other charge called loading" whic
. represents the expenses Of the eompan
J and the losses Of capital by-unfortunat
= investments. The "loading" may b
: heavy or light, according TO the taste
q and habits OF, tho managers, and tf
s amount Of judgment and tao. which the
o exercise in employing their capital.
Leaving out Of account tho "loadingr
l the net single premium is calculate
! something after this fashion: suppoH
!, i. tho party assured to be 40 years Of as
|. and the sum named init policy 81 ,OO
j. II there was certainty that the ma
Q would die within the year and that Il
!, company would have TO pay the money
: the close Of the year, the premium wou
> simply be 81 900 discounted for one YET
4 at i per cent (s96l 64). But he III
. ninety.eight chances out Of ten thousar
}. OF living beyond the year; hence thepr
8 MUM should be nincty.cight ten.tho
Q sandths Of 1851 81, or 50 AZ. II it We
% certain that the money would have to
= paid at the end Of two years the net pr
!. MUM would be 81 900 discounted at P,
o cent, compound interest for that TIN
e 1924 Soy; but the assured has ninet
d nine chances in ten thousand OF liyil
J beyond that period; hence the premiu
= should be ninety.nine ten.thousandthS
= - 1924 50, or 50 10 for the second year, al
!. so on up to 95. Add all these sums I
y gether and We have the net single prem
i um that must paid to secure the payne
Q Of $1,000 at death--SS67 IS.
= But the net single premium involv
q the outlay Of q larger sum at one pa.
i. ment than the majority o., those who /