The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1878-04-19
LIFE INSURANCE.

CALCULATIONS CONCERNING LIFE INSURANCE
POLICIES AND VALUES.
General Gustayus W. Smith has written a pamphlet
entitled, How 10 Find Out What a Lie Insurance
Company owes YOU" In which ne explains the sun
pie priLciples upon which calculations oil legal
money values the life insurance business
are founded. one OF the judges Of tue United
staies supreme Court ssys that the authors
"method Of explaining the principles OF hte
insurance is SO simple that he WHO ought DO
able read. But 10 Is wonderful what profound L.
prevails tho first clements Of tho subject
The pamphlet Is without the suggestion OF a desire
TO promote tho interests of speculation. but 1t
develops the principles upon which lie Insurance. Is
based and indicates grounds for confidence the
injured. There now, the author says, about
So 90 00U insured upon the lives OF nearly mill
lou oil IN this country The text proper OF tho
psmpnlct contained In less than fifteen pages The
FIRST refers mortality tables and interest money
Tue second page explains the method OF computing,
any age, the cost OF insurance for any
ono year. IL Is shown that at age 40 tho net cost
oil insurng 81, 900 for year 50 90 An allowance
Of 80 per Is made Tor expenses and profits giving
SIS IS full premium II is stated that tho FULL annual
premium usually caarpe ed BY the com anies varies
bat age 10 from $3l Tue explanation Of this
large ovcrcharge .hat mo net cost Of Insurance
year increrses With tue age, being, on policy
OF 81 600, but 81 VI at aye 20. while is $62 AZ
age 10 The annual premium charged by the company
be,ug the eacn year ~ must, IN the earlier
years, be IhaD sufficient to cay tue each
year. order that the may be effected the
later without an Increase IN the annual premium
The question Is thea presented, ''Suppose policy
holder disconnues the Insurance and ais TO pay his
renewal annual preminm wnen due. what In this
snould be uone WITH the overpay menls he HAS made
IN previous years ~ These overpaymunts constitute
what ifs insurance officers aud agents call tho
PRESERVE" FIRE insurance men would understand IL
20 be "unearped premium" The author OF the
pamphlet calls " "dcposin intended solely Tor tho
Ia insurance OF the policy. He argues to show how
smount at the end OF any year Of tue po,icy may
be easily and readily computed upon data prescribed
by law aud while distinctly Recognizing tho Iaet that
existng legal contracts must stand unless modified
With the consent OF all the parties, no MAN
tains that IN contracts yet TO DO made
the companies should not DO permitted TO
appropriate 10 them elves sthe ucd value OF
Lille Insurance pocics whether GU cali " reserve
s.unearned premium deposit" or any otner OF
the various names by VIII Oh this important fund u
sometimes designated It's nature aud usos well
the method OF computing its amount are July dts
Guessed.
Tho legal disposition that should be mado of the
fund sccruiDg upon policies Issued hereafter by com
pauios organze under authority oil TINS State s now
unosr consideration by the legislature The msgui-
Jude OF the interests involved may be agined from
tue TACT that single company ia this city holds
than $50 O0U 600 OF these trust Iunds In deposit
Tor future widows and orphans. The author contends
that the prevalent wonderfully profound Ignorance
regard to The first elements oil this subject should
be dispeicd.