440. Days of Grace, Reinstatement. Insurance companies usually allow 30 days of grace in the payment of premium. In some companies the insured may be reinstated on proof of insurable health and payment of the defaulted premiums.

There are many forms of

441. Other Forms of Life Insurance. life insurance besides those mentioned above. Income insurance provides a fixed monthly or yearly income for the beneficiary after the death of the insured. There is old age insurance, etc.

ANNUAL PREMIUMS IN AN OLD AMERICAN COMPANY

1. What is the yearly premium on a $5000 straight life policy taken out at the age of 25?

2. What is the yearly premium on a $2000 20-payment life policy taken out at the age of 30?

3. What is the yearly premium on a $10,000 20-year endowment policy taken out at 35?

1. An ordinary life policy for $5000 is taken out at 30 years of age. What is the surrender value at the expiration of 15 years? For what paid-up policy may it be surrendered?

2. A 20-payment life policy for $10,000 is taken out at the age of 40. What is its surrender value at the end of 12 years? What is its value in terms of paid-up policy?

3. A 20-year endowment policy for $5000 is taken out at the age of 24. What is the yearly premium? How much will the premium amount to in 20 years?

PROBLEMS

1. A $5000 20-payment life policy is taken out at the age of 41. At 3% compound interest what will the premiums amount to in 10 years, in 15 years, in 20 years? (Use the table on page 242.)

2. In how many years will the premium on the policy in Example 1 amount to $5000 (the face of the policy), interest being compounded yearly at 3%?

Also solve the same problem, interest at 4% being compounded semiannually.

3. If in Example 1, the insured dies at the age of 57 years, how much will his premiums amount to, interest being compounded at 41%?

Suggestion. First find the premiums at 41 as given by the table on page 285 and then find the amount of this annuity at 41% interest compounded annually for 16 years.

4. A man takes out a $12,000 20-payment life at the age of 40. At the age of 48 he discontinues the policy and accepts the cash surrender value. How much does he get? If the premiums had been invested at 4% interest compounded yearly, how much would he have had?

5. A man takes out a $10,000 20-payment life at the age of 42. If he dies at 49 how much more would his estate receive than if he had placed the premiums at 4% interest compounded annually?

6. A man takes out a 20-payment life policy for $50,000 at 35 years of age. The dividends of the company reduce the premiums as follows: 4th year 4%, 5th year 5%, 6th year 5%, 7th year 6%, 8th year 7%, 9th year 7%, 10th year 74%, 11th year 8%, 12th year 9%, 13th year 9%, 14th year 9%, 15th year 9%, 16th year 9%, 17th year 10%, 18th year 10%, 19th year 11%, 20th year 12%. How much would the premiums amount to at the time of his death at 63 years of age if invested at 44% compounded yearly?

7. If the premiums actually paid on the policy in Example 6 had been invested at 4% compounded yearly, how much would they amount to at the time of the man's death?

Copy from sight, divide, and check. Get quotients to the nearest

CHAPTER XXXII

DIRECT TAXATION

442. Public Expenditures. Our various governments make great expenditures of money for many purposes. The city provides schools, police, and fire protection. It paves the streets, lights them, and builds sewer systems. The county and township governments build roads and bridges, etc. The state and the national government expend great sums for various public purposes. Nearly all the money needed for these expenditures is obtained through taxation.

443. Forms of Taxation. -Taxes may be in the form of direct taxes, which consist of property taxes, income taxes, license fees, and a personal tax called a poll tax, or they may be in the form of indirect taxes such as tariff on imports.

444. License Tax. Many business concerns have to pay a yearly fee for permission to conduct their business. Saloons, where they are permitted, usually pay a large license fee. Hotels, drug stores, candy stores, circuses, auctioneers, street venders, taxicabs, street cars, etc., frequently pay license fees.

445. Property Taxes. - By far the greater part of the funds of the local and state governments are derived from property taxes, and real estate, consisting of land and buildings, contributes most of these. Personal property, consisting of all kinds of property not real estate, is also taxed, but levying a tax on such property presents practical difficulties which greatly reduce the amount derived from it.

446. Assessors. Men, called assessors, are appointed to make lists of the property of each person. The value put upon property by the assessors is called the assessed valuation.