Educational Leaflets (Paperback)

This historic book may have numerous typos, missing text, images, or index. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. 1915. Not illustrated. Excerpt: ... An endowment policy maturing by completion of the endowment period is technically and literally a Claim, not a Loss. On the other hand, a policy maturing by the death of the insured may be technically termed a Loss, but is literally a Death Claim. It is a claim for its face amount, and the face of the policy is literally, though not technically, the amount at risk. The latter term is in general use, and its technical signification is fully established and must be kept in mind. The use of the term will be clearly illustrated by the following table, based on the figures of our hypothetical company. (See Verification Table, pages 46 and 47.) Cost Of Insurance Taking the amount at risk in its technical sense as the actual loss in the case of a death claim, we determine the mortality cost, or Cost of Insurance, for the year as follows. At age fifty-six the amount at risk on an ordinary life policy in the first year is $970.10. Of the 63,364 members comprising our hypothetical company, 1,260 will die during the year, making the net loss $970.10 multiplied by 1,260 or $1,222,326.00, which is the total cost of insurance for the year. Dividing this amount by 63,364, the number living at the beginning of the year, we obtain $19.29, which is the pro rata cost of insurance per $1,000 for the first year. In the fifth year the amount at risk is $849.67, and multiplying this by 1,546, the tabular number of deaths, we get $1,313,589.82 as the total cost of insurance for the year. Dividing by 57,917, the number living at the beginning of the year, we obtain $22.68 as the cost of insurance per $1,000 in the fifth year. At ninety the amount at risk is $127.82 and the total cost of insurance is that sum multiplied by 385, or $49,210.70. Dividing by 847, the number living a...