INSURANCE. 442. INSURANCE is a contract of indemnity, by which one party engages, for a stipulated sum, to insure another against a risk or loss to which he is exposed. The insurer or underwriter is the party taking the risk. The premium is the sum paid for insurance, and is generally reckoned at a certain per cent. of the value of the property insured. The policy is the written obligation or contract. NOTE. Insurance is generally made by an incorporated joint-stock com pany, and sometimes by individuals. When each person insured becomes a member and proprietor in the profit or loss of the concern, it is called a mutual insurance company. Many companies, as a security against fraud, do not insure property for its full value. FIRE AND MARINE INSURANCE. 443. Fire Insurance is that which indemnifies damage and loss caused by fire or lightning. 444. Marine Insurance is that which indemnifies damage and loss caused by the perils peculiar to navigation. 445. To compute the premium of insurance on any given amount at a specified rate. Ex. 1. What would be the premium for insuring a house, valued at $5728, at 12 per cent. ? Ans. $100.24. RULE. - Find the percentage of the given sum at the rate of insurance, and the result is the premium. NOTE. When the amount insured and the premium are known, the rate of insurance may be found by Art. 350. EXAMPLES. 2. What is the premium for insuring a house valued at $896, at 12 per cent.? Ans. $107.52. 3. How much would be required to be paid to effect the insurance of a brig valued at $ 17,289, at 11 per cent.? Ans. $216.11. 4. My ship Keystone State is valued at $35000, and her cargo at $75000. I procure an insurance on of the value of the ship, at 31 per cent., and on of her cargo, at 21 per cent. What is the amount of premium? Ans. $ 1932.50. 5. My library, worth $3675, I got insured by paying 47 per cent.; and the policy cost me $1. The library having been destroyed by fire, what was my actual loss? Ans. $180.15g. 6. The premium for insuring $9870 was $690.90. What was the rate per cent.? 7. White & Bigelow effect an insurance on their store and goods, worth $47600, for 5 years. The first year they are to pay 44 per cent.; the second year, 37 per cent.; the third year, 43 per cent.; the fourth year, 5 per cent.; and the fifth year, What is the whole they are to pay for the inAns. $11,007.50. 5 per cent. surance? 446. To find what sum must be insured, at a given rate, to cover both property and premium. Ex. 1. For what sum must a policy be taken out, to cover both property and premium, the value of the property being $2475, and the rate of insurance 10 per cent.? OPERATION. $2475.90 = $2750. Since the sum to be covered by the insurance includes both the property and the premium, and as the premium is 10 per cent., or .10 of that sum, the property, evidently, must be .90 of the sum for which the policy is to be taken out. RULE.-Divide the value of the property to be covered by 1 decreased by the rate of insurance expressed decimally, and the quotient will give the whole sum to be covered. NOTE. When the rate of insurance and premium are known, the amount insured may be found by Art. 350. EXAMPLES. 2. A manufacturing company own a factory valued at $26250. For what sum must a policy be taken out to cover the property and premium of insurance, the rate being 12 per cent.? Ans. $30,000. What sum must property and preAns. $6500. 3. A store and its goods are worth $6370. be insured, at 2 per cent., to cover both mium? 4. The premium for insuring a school-house, at the rate of 1 per cent., was $50. For what sum was it insured? Ans. $4000. 5. If a policy covering property and premium be taken for $ 600, at 10 per cent., what is the value of the property covered? Ans. $540. 6. A merchant adventured $1000 from Boston to New Orleans, at 3 per cent.; thence to Chili, at 5 per cent.; thence to Canton, at 6 per cent.; and thence to Boston, at 7 per cent. For what sum must he take out a policy, to cover his adventure the voyage round? Ans. $1241.348. LIFE INSURANCE. 447. Insurance on life is a contract which stipulates for the payment of a certain sum of money on the death of one or more individuals, in consideration of an immediate payment, or an annual premium, being made by the insured. A temporary insurance on life is a contract to pay a certain sum in case a given individual dies within a given number of years. 448. The amount of premium required of the insured as a security for the payment of a certain sum at his death by the insurer, is based upon the expectation of life of the insured, and on the rate of interest or net profit the insurer may be able to make by investing the premium. 449. By expectation of life is meant the average number of years of life that remains to any individual of a given age, as determined by the rates of mortality. 450. The Carlisle Table of the Expectation of Life, which is in general use in England, has also been taken as a guide by some American companies in fixing their rates of insurance. Other companies have been guided in fixing their premiums by a table prepared by Dr. Wigglesworth, with a special reference to mortality in this country, and which the Supreme Court of Massachusetts has adopted as a rule in estimating the value of life estates. 451. The expectation of life, according to the Carlisle Table and according to that prepared by Dr. Wigglesworth, is shown in the following TABLE. 0 38.72 44 68 47.55 49.82 5 32.36 31.68 11 48.04 38.64 35 31.00 12 47.27 38.02 36 30.32 13 46.51 37.41 37 29.64 27.34 28.15 24 38.59 32.70 -48 22.80 36.78 25 37.86 32.33 49 21.81 88.74 26 37.14 31.93 50 21.11 40.01 27 36.41 31.50 51 20.39 4 50.76 40.73 28 35.69 31.08 52 19.68 51.2540.88 29 35.00 30.66 53 18.97 19.49 77 6 51.17 40.69 30 34.34 30.25 54 18.28 18.92 7 50.80 40.47 31 33.68 29.83 55 17.58 18.35 79 5.80 50.24 40.14 32 33.03 29.43 56 16.89 17.78 80 5.51 5.85 49.57 39.72 33 29.02 57 16.21 17.20 81 5.21 5.50 10 48.82 39.23 34 28.62 58 15.55 16.63 82 4.93 5.16 28.22 59 14.92 16.04 83 4.65 4.87 27.78 60 14.34 15.45 84 4.39 4.66 61 13.82 14.86 85 4.12 4.57 62 13.31 14.26 86 3.90 4.21 35.76 40 27.61 35.37 41 26.97 25.61 65 11.79 12.43 89 3.47 3.56 34.98 42 26.34 25.19 66 11.27 11.96 90 3.28 3.73 34.59 43 25.71 24.77 67 10.75 11.48 91 3.26 3.32 34.22 44 25.09 24.35 68 10.23 11.01 92 3.37 3.12 40.75 33.84 45 24.46 23.92 69 9.70 40.04 33.46 46 23.82 23.37 70 9.18 10.06 94 3.53 1.98 23 39.31 33.08 47 23.17 22.83 71 8.65 9.60 95 3.53 1.62 64 12.30 13.05 88 3.59 3.67 10.50 93 3.48 2.40 Against any age given in the table may be found the expec'tation of age corresponding to it. 452. The transactions of life insurance companies extending as they do over a term of years, the value of money and the average rates of interest, no less than the expectation of life, have an important influence in fixing their rates of insurance. 453. The premiums of life insurance are generally reckoned at a certain sum on $100, payable annually in advance. The rates of annual premium for insuring a healthy life for one year, for seven years, or for the whole period of life, in the sum of $100, by the Massachusetts Hospital Life Insurance Company, of Boston, and by the Girard Life Insurance Annuity and Trust Company, of Philadelphia, are given in the following |