American Life Insurance Methods

Life insurance is in all cases essentially a simple operation, embracing at most four or five easily comprehended elements.The moneys paid in by the insured form a fund which may or may not be improved by interest; from this accumulation from time to time are deducted the death-losses and other maturities paid and the expenses of the company.The remainder, if any, is either carried forward, sometimes as policy-credits, sometimes as a general fund, or else is divided among the insured.It will be observed that in any case the operation is radically mutual, the same persons being in effect if not in name both insurers and insured.Of course, these four simple elements-to which might be added a fifth, namely~; the increase of individual shares in the fund by the diminution of the number interested-admit of a variety of permutations and modifications.The diver- sities created by modes of treating these elements have led many men to think that life insurance is complex and indeed undecipherable to any but the most expert.This idea has been fostered by persons interested in preventing too clear an understanding of life insurance becoming common.On the one side it has suited many to get a reputation for learning by looking wise and talking in cabalistic language.On the other side it has subserved the selfish interests of many others to cause the people to think that this mystery is for no purpose but to conceal fraud.Both sides are equally disposed to avoid the light which might interfere with their personal ends.To begin at the beginning, there are several ways of collecting the premiums, falling naturally into two groups, namely; payment in advance or payment upon call after the death for which indemnity is demanded.The latter was

Actuarial science · Business · Life insurance · Insurance and Financial Risk Management · Insurance, Mortality, Demography, Risk Management