5. A house 50' x 40' x 40', costing 10 per cubic foot, with an addition 14' x 16' x 10', costing 5¢ per cubic foot, was insured for 1 yr. at 50¢ per $100. At the end of 60 da., the policy was canceled by the owner. What amount was returned to the insured? (The short rate for 60 da. is 30% of the annual premium.)

6. A house valued at $10,000 is insured in one company for $3000, in another for $2000. A loss of $8000 is sustained. Under a coinsurance clause, how much loss inust be borne by the owner?

7. A company carries insurance on its stock of merchandise, valued at $25,000, to the amount of $12,500 under a policy containing the coinsurance clause. In the event of a $4850 loss, what will the company receive from the insurance company?

LIFE INSURANCE

311. In life insurance, the contingency insured against is the death of the insured. The policy may, however, agree to pay a fixed sum at the expiration of some specified time.

On the death of the insured, the amount of the policy is paid to some one named in the policy, called the beneficiary. 312. Life insurance policies may be classified as wholelife, term, and endowment.

313. In whole life policies the face of the policy is payable at the death of the insured.

314. In term policies the sum insured is payable only if death occurs within a stated period; after this period the policy lapses.

315. An endowment policy provides for the payment of a stated sum to the insured at the expiration of a stated period, if he is then living; or to his beneficiary in case of death before that time.

The above is taken from the rate book of one of the large

companies.

It is advisable to secure sample policies for examination of cash values, extended insurance, etc.

EXERCISES

1. Find the annual cost of an ordinary whole-life policy for $3000 at the age of 25 yr.

According to the table the rate per $1000 at age 25 is $20.88. On $3000 the premium (cost) is 3 x $20.88, or $62.64.

2. What is the annual cost of a $10,000 policy on the life of a man 30 yr. of age on the ordinary whole-life plan?

3. A man, age 33, insures for $5000 on the 15-year endowment plan. At the expiration of the period, how much more than the face of the policy will he have paid the company in premiums?

4. How much would the payments in the preceding problem amount to at 2% compound interest?

5. A man 30 yr. of age took two policies; one for $1000 on the 20-payment life plan, the other for $1000 on the 20-year endowment plan. At the expiration of the 20 yr. the value of the 20-payment life policy was $555; the value of the endowment policy was $1000. As an investment, which was the better policy if money was worth 3% per year? (Use Annuity table, page 156.)

6. A merchant 34 yr. old took out $10,000 of ordinary life insurance as a means of protection to his creditors. What premium does he pay?

7. A 15-yr. endowment policy for $2000, written on the life of a man 37 yr. old, is deposited as collateral for a loan of $400 at 7%. What is the cost of premium and interest annually?

8. A man 29 yr. old pays a premium of $207.72 on a 10-yr. endowment policy, and $133.56 on a 20-payment life policy. How much insurance does he carry?

STOCKS AND BONDS

STOCKS

317. Stock companies are associations of persons authorized by law to transact business as one individual. They are called incorporated companies, or corporations.

318. Stocks represent the capital, property, etc., which a company invests in a business under the law of the state.

319. A share represents a certain equal part of the capital stock. Shares are of any value assigned to them, as $25, $50, $100.

320. A stock certificate is a printed statement, signed by the officers of an incorporated company, stating the number of shares owned, the par value of each, etc., to which the holder is entitled.

321. The par value is the value assigned to the stock by the corporation.

322. The market value is the value for which stock can be sold. It depends upon the dividends paid, security of the business, business conditions, etc. The market value is the quoted value, and may be par, above par, or below par. Thus, par being $100, a stock quoted at 123 is above par; at 76 it is below par.

323. A dividend is a certain amount of profit, based upon the par value of the stock, divided among stockholders.

324. An assessment is a sum levied upon stockholders to make up losses, to make improvements, etc.

325. Preferred stock is stock to which some preference has been given, over other stock issued by a corporation. It

receives the first profits distributed, sometimes at a guaranteed rate per cent.

NOTE. There are so many different kinds of stock issued that investigation of the constitution and by-laws of the corporation is the only safe guide for anyone investing in its stock.

326. Common stock is stock generally issued by companies, and carries with it no guarantee of dividends.

327. A stockbroker is a person who makes a business of buying and selling stocks for others; he usually charges, as commission, or brokerage, of 1% of the par value of the stock on each transaction. In some small exchanges the charge is of 1%.% will be taken as the charge in all problems in this book unless otherwise stated.