PART III

SECTION XV.

LIFE AND ACCIDENT INSURANCE.

314. Life Insurance is an agreement in which a company binds itself to pay a certain sum of money on the death of an individual, in consideration of an annual sum paid into the treasury of the said company, for a term of years, or during the life of the insured. The insurance may be made payable to the heirs of the insured, or to any person whom he may designate.

315. Accident Insurance is an agreement of a company to pay a certain sum of money to a person in case of accident or sickness, in consideration of the payment of a stipulated sum, into the treasury of the company. This insurance is usually only for short periods, and instead of a policy, tickets are issued to the insured.

316, The Policies of life insurance are usually for life, the annual premiums on which either continue through life, or cease at the end of a given time. Life insurance is usually based upon the Carlisle tables of the expectancy of life.

317. The Expectancy of Life is the average number of years that a person will live after a certain age. This is determined by tables of average .mortality.

The following table gives the expectancy of life; the present value of an annuity of $1.00 for the number of the years of expectancy of life at 6 per cent.; and the usual annual premium on $100 of a life insurance policy.

*NOTE FOR THE TEACHER.-The following sections are designed for classes that desire instruction in the solution of more advanced commercial, mechanical, and philosophical problems than are usually given in a common school course. Theory of numbers is made to give place to those subjects which will be of the most service in the future experience of the student, hence but little or no attention has been given to the proportions, progressions, duodecimals, permutations, scales, etc.

1. What will be the annual premium which I must pay for a life policy of $5000 if my age is 27 years?

2. A man at the age of 44 years desires a life policy of $4500; what annual premium must he pay?

3. A man at the age of 60 years inherits an estate for life having a rental value of $1000 per annum; what is the present worth of the estate?

4. Mr. Nash, at the age of 21 years, inherited a farm for life, the annual rent of which is worth $500; he is taxed on the present value of the farm; what is the amount of his tax at %?

5. The age of my sister is 26 years; I wish to settle on her $10000; what annuity shall I give her for life, that it shall amount to that sum ?

GENERAL AVERAGE.

318. General Average is the method of apportioning among the several interests in a vessel, the loss occasioned by the sacrifice of property at sea for the general good.

319. By Jetson is understood the property sacrificed. The property is usually taxed in the following manner :

1. The value of the vessel before its loss.

2. Two-thirds the value of the freight.

3. The market value of the cargo at the port of destination. (a.) The loss which is apportioned, is

1. Jetson, or the property thrown overboard or damaged.

2. Two-thirds the expense of the repairs of the vessel.

3. Expense of the vessel while detained in port.

6. The ship Juniper, in a storm, suffered the following loss: Jetson, $4465.50; repairs, $423; detention in port, $116.50. The value of the vessel is $30000; freight, $6225; cargo, $26650. How should the loss be apportioned ?

What is the loss per cent.?
ANS. 8%.

Vess., $2400.

Freight, $332.

Cargo, $2132.

7. The schooner Elliot has the following cargo: wheat invoiced at $22500; corn invoiced at $9250; and flour invoiced at $4250. The gross freight was $6000; the seamen's wages, etc., gross freight. The vessel was insured in company A at 3 % for $30000, which is of its value; the wheat in company B at 2 %; the corn in company C at 1%; and the flour in company D at 24%. During a storm the flour was thrown overboard; what is the loss per cent.? What part must each insurance company pay of the loss? ANS. 5%.

A. $1500.

B. $1125.

C. $462.50.

D. $212.50.

CUSTOM-HOUSE BUSINESS.

320. Duties, or Customs, are taxes levied by government on goods imported or exported.

321. A Custom House is an office established by government for the purpose of collecting duties on goods imported or exported.

322. A Port of Entry is a port designated by law where duties may be received on imported or exported goods.

*The deduction in New York is the freight, but in other ports it is. The general practice is, however, to find what is actually left after payment of the seamen's wages, etc.

t One-third is deducted from the cost of repairs on account of the greater value of the new material.

323. Tonnage is a tax levied upon vessels according to their size, for the privilege of coming into a port of entry.

324. Revenue is the income of government from duties, tonnage, taxes, and other resources.

325. An Ad Valorem Duty is estimated at a certain per cent. on the value or cost of the goods exported or imported.

326. A Specific Duty is estimated on the weight or measure of goods, independent of their cost.

327. An Invoice is a list of imported goods, giving the quantity and price.

328. Tare is an allowance for the weight of packages that contain goods.

329. Leakage is an allowance for the waste by leaking of liquors imported in casks or barrels.

330. Breakage is an allowance for the loss by breaking of liquors imported in bottles.

331. Gross Weight is the weight of goods, including the packages. 332. Net Weight, or Value, is the weight or value of goods after all allowances of tare, leakage, &c., have been made.

NOTES.-1. Tare is ascertained by actually weighing one or more of the empty boxes, casks, or other packages. It is sometimes computed at a certain per cent.

2. The customary breakage for porter, ale, and beer, in bottles, is 10 per cent.; but 5 per cent. on all other liquors in bottles. At the Custom House 1 doz. bottles of the common size are estimated to contain 2 gallons.

3. The customary leakage for liquors in casks is 5 per cent.

333. To find the amount of duty on an invoice of merchandise.

What is the duty at 25 per cent. on 30 gross of champagne, invoiced at $1.50 per doz., 23 per cent. being allowed for breakage?

MODEL OPERATION.

1. $1.50 × 360=$540, gross value.

2. $540.023=$14.85, breakage.
3. $540-$14.85 $525.15, net value.

4. $525.15 ×.25-131.29, amount of duty.

Anal. Steps.-1. Find the gross value.

2. Find the deduction for breakage.
3. Find the net value.

4. Find the amount of duty.

NOTE.-Require the pupil to write a rule from the analysis.

8. What is the duty at 18 per cent. on 237 yds. of black silk, invoiced at 78 cts. per yard?

9. What is the duty at 25 per cent. on 125 barrels of whale oil, invoiced at 87 cts. per gallon, allowing 24 per cent. leakage?

10. What is the duty at 20 per cent. on 250 bags of coffee, each weighing 160 lb., invoiced at 6 cts. per pound, an allowance of 2 per cent. being made for tare?

11. A merchant imports 137 cases of indigo, each case weighing 197 lb.; how much will the duty amount to at cts. per pound, allowing 15 per cent. tare?

FOREIGN EXCHANGE.

334. To find the cost of a foreign bill of exchange, when at a premium or at a discount.

335. English Bills.—In all bills of exchange on England, the pound sterling is reckoned at its former, or nominal value of $43, instead of its present value of $4.86. The real value is 9 per cent. above the nominal value.

336. French Bills.—In all bills of exchange on France, the franc is reckoned at the value of $0.186.

(a.) NOTES.-1. Bills of Exchange in England are drawn in pounds, shillings, and pence, and exchange is quoted at a certain per cent. upon the nominal value; hence, when exchange is quoted at 9 per cent. premium, exchange is really par; when quoted at 10 per cent. premium, exchange is really per cent. premium.

2. Bills of Exchange on France are drawn in francs, and exchange is quoted at so many francs and centimes to the dollar.

3. Foreign bills are usually drawn in sets of the same tenor, and date, each containing a condition that it shall be payable only while the others remain unpaid.

337. To find the cost of a bill of exchange on England, when at a premium, or at a discount.

£347. 7s. 8d.

NEW YORK, Oct. 13, 1868.

At sight of this my first of exchange (the second and third of the same date and tenor unpaid) pay to L. K. Dennis or order three hundred fortyseven pounds seven shillings eight pence, value received, and place the same to my account.

To Messrs. ROTHSCHILD & Co.,

London, England.

JONAS J. JONES.