Insurance

Life, a form of contract entered into by a life insurance company and an individual. The written contract is known as a policy. The policy stipulates usually that the holder shall pay the company a certain sum annually for life or for a term of years. Such payments are called premiums. The policy further stipulates that the company shall pay the heirs a certain sum at the time of the holder's death, or that the company shall pay the policy holder himself a fixed sum if he shall survive a certain term of years. The system of paying premiums for life, with payment of death loss to heirs, is called straight life insurance. The plan of payment to the holder at the end of a term of years is called endowment insurance. Combinations of straight, endowment, profit-sharing, tontine, and old age annuities are too numerous for mention.

Life insurance charges are based on tables of mortality. Under ordinary conditions experience has shown that of 1,000 healthy persons of the same age a certain number may be expected to die each year. The first mortality table was drawn up by a Dr. Price of Northampton, England, in 1780. American companies now base their calculations on a mortality table drawn up from the actual experience of a large number of companies. One who proposes to take out a policy is required to pass a medical examination. The older the person, the greater the annual premium. Premiums are rated, too, at so much per $1,000 of insurance.

Life insurance had its origin in England. The first company was the Amicable Society founded in 1706. It was followed in 1762 by the Equitable Life Assurance Society. There are now about 100 British companies. Life insurance is now a general practice the world over, especially among salaried people and business men who desire to guard their families against the combined chance of death and bankruptcy. John Wanamaker, the wealthy Philadelphia merchant, left policies to the value of a million dollars. According to the life insurance statistics furnished by the companies for 1908, the life insurance in force in the United States was about $20,800,000,000; Great Britain, $4,426,-000,000; Germany, $1,400,000,000; France, $727,000,000; Austria, $371,000,-000; Scandinavia, $150,000,000; Switzerland, $144,300,000; Russia, $63,000,000.

Insurance companies are organized on a larger scale in the United States than elsewhere. There are about 200 companies. They collect (1908) $500,000,000 a year in premiums and pay policy holders about $300,000,000. The assets of these companies, that is to say, the actual property,--real estate, bonds, stocks,--amount to over $2,399,000,000. Three companies known as the "Big Three," namely, the Mutual, the Equitable, and the New York Life, reported assets January 1,1904, at $1,134,-178,500,--a sum greater than the capital of all the national banks in New York; six times as large as the capital of the Bank of England, Bank of France, Bank of Germany, and Bank of Russia, all four combined.

In addition to the insurance offered by companies, there is a form known as fraternity insurance. Associations are formed whose members are assessed the actual amount needed to cover expenses and pay death losses. There are insurance companies in connection with a number of the older fraternities, are based mainly on an insurance feature.

The following statistics are approximately correct for 1908:

ASSESSMENT COMPANIES AND ORDERS.