5. Insurance companies usually refuse to insure unoccupied buildings because of their liability to be burned by incendiaries. a. In no case can the insured collect more than the value of the property destroyed, even if the valuation in the policy is greater and the risk is a total loss. b. For terms of insurance less than one year, the rates of fire insurance are proportionally much greater than regular or year rates. The rates for such short terms are known as short rates. 6. The assets of an insurance company include all property of the company, as cash, real-estate, securities, balances due, etc. The liabilities are all of its debts, outstanding obligations, reserve for re-insurance, premiums paid in advance, etc. LIFE AND ACCIDENT INSURANCE. 7. Life insurance is a guaranty to pay a specified sum of money to the heirs or beneficiary of a person when he dies, or to himself, if living at the end of a specified term. a. The reserve of a life insurance policy is such a sum as, put at interest at the rate established by law, and increased by the net premiums still to be paid, will amount to the sum guaranteed by the policy, when it will become due as shown by average life tables. b. The surrender value of a life-insurance policy is the amount of cash which the company will pay the holder at any time upon the surrender of the policy. It is the legal reserve less an estimated per cent for expenses. c. The expectation of life is the number of years that a person of a given age will probably live. It is the average life of persons of that age as determined by carefully kept records of mortality. d. The premium may be payable annually, semi-annually, or quarterly-as prescribed by the terms of the policy. 8. Accident insurance is a guaranty to the insured of a weekly indemnity in case of disability from accident, or of the full valuation in case of death from accident. a. The payment of the weekly indemnity is usually limited, by the terms of the policy, to the term of six months, whether the disability has ceased or not; and in any case the weekly indemnity ceases when the disability ceases. b. Death resulting from accident must occur within 90 days of the accident to secure the payment of the full valuation. a. The tables here given are those of the Equitable Life Assurance Society of the United States. b. The Tables of Rates of different life insurance companies vary according to the plan of insurance followed by the company; but the real cost of insurance is very nearly the same in all, for the benefits secured. Ex. 1. I desire to take an ordinary life policy for $2,500. If my age is 33 years, what annual premium must I pay? PROCESS. $25.50, premium on $1,000 at 33 years. (See Table.) $25.50 x 2.500 $63.75, the annual premium required. Ex. 2. Find the total amount of the payments, without interest, on a life policy of $12,000 secured by 15 annual payments, and issued to a person 42 years old. PROCESS. $49, premium on $1,000 at 42 yr., 15 payments. $49 × 12.000 = $588, annual premium on $12,000. $588 × 15 = $8,820, the total sum of payments required. Ex. 3. Find the total amount of the payments to secure a 20-year endowment of $10,000, age 38. PROCESS. $52.10, premium on $1,000. (See Table.) $52.10 x 10.000 x 20 $10,420, total payments required. = PROBLEMS. Find the annual payment required at the age of 40 for a policy of $4,250 1. By the ordinary life plan. 3. By the 20-year endowment plan. 2. By the 20-payment life plan. 4. By the 30-year endowment plan. 5. A clergyman at the age of 35 had his life insured by the ordinary plan for $5,000, and died after making 17 payments. How much more did his family receive than he had paid to the company? 6. If I take an endowment policy of $3,000 at the age of 28, payable to myself in 20 years, and the dividends increase the policy $912.25, how much more will I receive from the company than I have paid? 7. Two persons aged 35 years and 42 years each take a life policy premiums payable until death. What will be the age of each when the payments of premium exceed the face of the policy? 8. A gentleman 36 years of age has his life insured for $4,000 premium during life, after the sixth payment the premium is reduced onehalf by dividends. Find the amount of the first 20 payments. GENERAL Average. 10. General average is the adjustment of losses of property at sea -voluntarily made for the purpose of saving the vessel and the remaining cargo. a. That a loss may be subject to general average, three conditions are necessary,— 1st. A necessity for sacrificing a part to save the remainder; 2d. The actual sacrifice of a part to save the remainder; and 3d. The remainder must be saved as a result of the sacrifice. b. Jettison is the portion of a cargo thrown overboard in order to lighten the ship and save the remainder of the cargo. c. Salvage is the amount paid for assistance rendered by another vessel in time of danger. 11. The contributory interests in general average are (1) The value of the vessel when refitted. (2) The freight less for seamen's wages. In New York, Virginia, California, and some other States of the freight is deducted for seamen's wages. (3) The full value of the cargo at its port of destination. 12. The losses and expenses subject to general average are (1) Jettison, and also the damage to other parts of the cargo from the removal of a part, either by water or by breakage. (2) Repairs to the ship lesson account of superior worth of new work. (3) Expenses of detention, including salvage, wages, and provisions of crew, expense of unloading and reloading, adjuster's fees, etc. 13. In computations in general average, 1. Total contributory interest = base. | 2. Loss + expense = the percentage. PROBLEMS. 1. The ship Silas Richards on a voyage from New York to Charleston became stranded on the coast of North Carolina, when it was found necessary to throw overboard 506 barrels of flour belonging to Goodrich & Co., worth in Charleston $6.87 per barrel. The expense of getting the ship afloat was $197; of supplying new rigging, $240; and the necessary expenses of detention were $240. The ship, at the time of average, was valued at $10,232; the freight at $4,800. Goodrich & Co. had on board 1,000 barrels of flour; Burke & Malone goods worth $4,000; Miller Bros. goods worth $5,236; and Jones, Howe & Co. goods worth $9,000. Find how much Goodrich & Co. realize on their shipment of flour; how much each interest contributes towards the loss; and the per cent on the contributory interests, the adjuster's fees being $75. Statement of Charges. |