The herald and news. [volume] (Newberry S.C.) 1903-1937, 1912-10-15
TAKING A CHANCE on DEATH
How Life Insurance Companies Are
Able to Figure Average Life
of Human Being.

If you were told to fiure out the
= roblem of human life and determine
he average age at which men die you
would probably declare it impossible
to do so with any degree of accuracy.
1T there's where you are mistaken
for on the solution of that very pro-
blcm the great life insurance COM
panies base all their financial strength.
: By knowing to mathematical certain
ty, Just how long the average man Will
live they are able to fix an equitable
rate of insurance and maintain suf-
ficient funds to meet all just claims,
and-what is vitality important-earn
interest meantime.
Contrary to the general belief life
insurance companies are not taking
any great chances, for all their cal
culations and rates are based on as
certained facts, as revealed by millions
of carefully collated cases, showing
the average number of deaths per l.
600 among various classes. Quoting
the rate for policy is no blind, hap
hazard operation, but one having a
sound actuarial basis For where in
dividual life is ever an uncertain quan-
tity, collective life is subject to a mys-
terious law of average, which enables
the companies to transform into a
practical scientific certainty what
would otherwise remain a perfect lot
terry.
These vital statistics are called NOR
tality tables, Of which there are sever
al. Lives differ in quality as in length,
and there is a great difference between
hat of the clergyman and the saloon
keeper. There is also big difference
in the quality and length of the lives
of grocers and coal miners, servant
girls and wives of wealthy men.
The calculation of your life is sim
pie. Let us suppose you are 30 years
of age. Deduct that from 80; then de-
duct third from the result. That
makes your expectation of life approx
imately 36 years, although you should
live longer or die sooner. But this is
your average, the basis of any life in
surance contract
Insurance companies, dealing-wi' h
colossal sums, must obviously max
their money work-yield the maximum
of interest And they command some OF
the finest financial talent available
keen, experienced men, knowing ali
the markets, always on the al"Tt for a
financial bargain" '1r':frollin3 vast
sums in liquid cash. c7astantiy aug
-cutSd by current "-cejnts, they are
in the best position to deal at the clos
est prices and at the psychological mo-
nent of depression or panic. More
over they are doublv strong. because
they can always select their own time,
both for buying and selling. What the
power of interest means may be gath
cred from two striking facts-one or
two companies can meet all their la
bilities out of their interest fund alone;
a certain big company earns over $780,
100000 a year in interest alone.
During the last twenty-five years
the public have paid about $2,OOO,OOO,-
600 in insurance premiums, while the
companies have paid their policy hold
ers about s2,5OO,OOO,0OO. Whence these
surplus millions? They have resulted
from the accumulative potentialities of
compound interest.
The colossal power of that process is
illustrated by statement
aa e y n Insurance expert: Had
-. aH>es il \ D. | Invested for