INSURANCE.

486. Insurance is security against loss.

487. Fire Insurance is security against the loss of property by fire.

488. Marine Insurance is security against the loss of property at sea.

NOTE.-Risks of transportation partly by land and partly by water, are called Transit Insurance. The same policy often covers both Marine and Transit Insurance.

489. Accident Insurance is security against loss by accidents. 490. Health Insurance secures a certain sum during sickness.

491. Life Insurance secures a stated sum to the heirs and assigns of the insured in case of death.

492. The parties who agree to make good the loss, are called Insurance Companies or Underwriters.

NOTE.-When only a part of the property insured is destroyed, the underwriters are required to make good only the estimated loss.

493. The Premium is the sum paid for insurance.

494. The Policy is the written contract between the insurers and the insured.

495. Insurance Companies are of two kinds: Stock Companies and Mutual Companies.*

496. A Stock Company is one which has a paid up capital, and divides the profit and loss among its stockholders.

497. A Mutual Company is one in which the losses are shared by the parties insured.

498. Insurance is calculated by Percentage; the sum insured being the base; the per cent premium, the rate; the premium itself, the percentage.

MENTAL EXERCISES.

499. 1. How much must be paid for insuring a house for $5000, at 1% premium?

ANALYSIS. Since the premium is %, the sum paid must be 1% of $5000. Now 1% of $5000 is $50, and 1% is of $50, or $25, Ans.

2. Find the annual premium of insurance, at 11% on a store and goods valued at $800.

3. I paid $8 for insuring $400; what was the rate?

ANALYSIS.—As the premium on $400 is $8, the premium on $1 is of $8 which is $.02, or 2%, Ans. (Art. 464.)

4. Paid $15 for insuring $1000; required the rate?

5. What amount of insurance, at 2% can be obtained for $40? ANALYSIS.—Since 2% is 18 or $40 is of this amount; and $40 is

0

of the amount insured, the premium of 50 times $40 or $2000. (Art. 466.)

6. What amount of insurance, at 4% can be obtained on a vessel for $100 ?

WRITTEN EXERCISES.

500. 1. What is the premium at 24% for insuring $16000 ? 2. What is the premium for insuring a store and goods valued at $7500, at 11% ?

3. What is the premium for insuring a house and furniture valued at $65000, at 4% ?

4. If $72 are paid for insuring $4800, what is the rate?

5. If $420 are paid for insurance on $18000, what is the rate? 6. If $860 are paid for insurance of $1720, what is the rate? 7. A merchant paid $157.80 to insure his store, at 11%; what amount did he insure?

23%; what

8. Paid $187 to insure half the value of a ship at 23%; was the total value of the ship?

501. To find the sum to be insured to cover the value of the goods and premium.

9. Bought goods in London for $7194. What sum insured, at 31% will cover the value of the goods and the premium?

ANALYSIS.-The bill is 100% of itself, and the premium is 31% of that sum; therefore, $7194 – 100% −31% = 96% %, or .9675 times the sum; now $7194.9675 $7435.658, the sum required. (Art. 468.)

=

10. If a store and goods are worth $16625, what sum must be insured, at 2% to cover the property and premium?

11. What sum must be insured, at 21% on a consignment of tea which cost $352.50 to cover property and premium?

12. A dealer shipped 1000 bbls. flour worth $6 a bbl.; for what sum must he take out a policy, at 21% to cover the value of the flour and the premium ?

LIFE INSURANCE.

502. Life Insurance Policies are of different kinds, and the premium varies according to the expectation of life.

503. Life Policies, are payable at the death of the party named in the policy, the annual premium continuing through life.

504. Term Policies are payable at the death of the insured, if he dies during a given term of years, the annual premium continuing till the policy expires.

505. Endowment Policies are payable to the insured at a given age, or to his heirs if he dies before that age, the annual premium continuing till the policy expires.

NOTE.-The expectation of life is the average duration of the life of individuals after any specified age.

13. What premium must a man, at the age of 27, pay annually for a life policy of $4500, at 41%?

14. What is the annual premium on $5000, at 51%, and what will it amount to in 20 years ?

15. A man took an endowment policy of $25000 for 20 yrs., at 5%. Which was the greater, the sum paid or the sum insured?

TAXES.

506. A Tax is a sum assessed upon the person, property, or income of citizens, for public purposes.

507. A Property Tax is a tax upon property.

508. A Personal Tax is a tax upon the person, and is called a poll or capitation tax.

NOTE. The term poll is from the German polle, the head; capitation, from the Latin caput, the head.

509. Property is of two kinds, personal and real estate.

510. Personal Property is that which is movable; as, money, stocks, etc.

511. Real Estate is that which is fixed; as, houses and

lands."

512. Assessors are persons appointed to make a list of taxable property and estimate its value for the purpose of taxation. 513. Property taxes are computed by Percentage. The valuation of the property is the Base.

The tax on $1 is the Rate.

The net sum to be raised, the Percentage.

514. To assess a Property Tax, when the sum to be raised and the valuation of the property are given.

1. A tax of $12500 is to be raised in a town the property of which is valued at $1500000, and there are 250 polls, each taxed at $2; what is the rate of the tax, and what is A's tax whose real estate is valued at $6000, and personal at $3000 ?

ANALYSIS.-The sum to be raised is $12500 less $500 on the polls, which is equal to $12000,

and $12000 ÷ $1500000

mills.

he

=

$.008,

A's property is $6000+ $3000

pays

OPERATION.

Town tax $12500 500

%, or 8

Poll

66

8 mills on $1, on $9000 he pays 9000

x.008 $72, and $72+ $2 (his poll tax)= $74.

=

Ans. The rate is 8 mills or %, and his tax $74. Hence, the

.008

RULE.-I. From the sum to be raised subtract the poll tax and divide the remainder by the amount of taxable property; the quotient will be the rate.

II. Multiply the valuation of each man's property by the rate, and the product plus his poll tax will be his entire tax.

NOTES.-1. If a poll tax is included, the sum arising from the polls must be subtracted from the sum to be raised, before it is divided by the value of taxable property.

2. The computation of taxes may be shortened by finding the rate, and giving the tax on $1 to $10, etc., as in the following

TAX TABLE.

515. Showing the tax on various sums at the rate of 8 mills on $1.

2. Find by the table B's tax whose property is valued at

$7256, and who pays for 3 polls at $1.50.

3. Find C's tax on property valued at $9480, who pays for 3 polls at $1.25.

4. What is D's tax on a valuation of $15676, and pays for 2 polls at $1.50?

5. A tax of $250000 is levied on a County whose real estate is valued at $3000000, and has 500 polls taxed at $2 each. Required the rate of tax, a tax table for that rate, and a person's tax whose property is valued at $5250, and who pays for 3 polls at $2 each.