THE NATURE AND USES OF LIFE INSURANCE
I.-NATURE OF LIFE INSURANCE AND THE BASIC PRINCIPLES UNDERLYING IT .
Definition and extent of life insurance, 3. Com- bination of many risks into a group is necessary to make the law of average apply, 5. Necessity of accumulating a fund for the payment of claims, 7. Necessity of accumulating this fund according to scientific principles and a workable method, 7. Life insurance changes uncertainty into certainty and is the opposite of gambling, 10. II.-FAMILY AND PERSONAL USES OF LIFE INSURANCE 13 Capitalization of the value of a human life and indemnification of that value, 14. The duty to insure, 15. Eliminates worry and increases initi- ative, 17. Life insurance makes saving possible, 18. Furnishes a profitable and safe investment, 19. Forces and encourages thrift, 20. Facili- tates the purchase of a home, 22. Furnishes an assured income in the form of annuities, 23. The relation of foregoing advantages to society at large, 25.
III.-BUSINESS USES OF LIFE INSURANCE
Close relationship between the home and busi- ness, 29. Life insurance as a means of indemni- fication against loss through the death of officials and valuable employees, 31. The use of part- nership insurance, 34. The insurance of em-
ployees for the benefit of their families, 36. insurance as security for bond issues, 38. The use of life insurance as a means of enhancing the credit of business enterprises during times of financial stringency, 40. The use of life in- surance as a means of borrowing without col- lateral, 42. The use of life insurance as a means of making contingent interests marketable, 45. IV.-CLASSIFICATION OF POLICIES
Policies classified according to the term, 47. Policies classified according to the method of pay- ing premiums, 47. Policies classified according to the inclusion or exclusion of a pure endow- ment feature, 50. Policies classified according to the method by which the proceeds are paid, 52. Special types of contracts, 55. Classification of annuities, 58. Combination of various types of policies, 59. The several types of policies equivalent in net cost, 60. Some policies better adapted than others to meet the special needs of the insured, 60.
Advantages of term insurance, 63. Disadvan- tages of term insurance, 67. Renewable and convertible features in term policies, 69.
Furnishes permanent protection, 72. Furnishes permanent protection at the smallest initial out- lay, 73. Combines saving with insurance, 74. Disadvantage of continuous premium payments, 76.
VII. LIMITED-PAYMENT POLICIES
Necessity for larger premiums under this plan during the premium-paying period, 79. Advan- tages of the limited-payment plan, 82. Paid-up
and extension benefits under the limited-payment
VIII.-ENDOWMENT INSURANCE
Definition and types of policies, 87. Analysis of
an endowment policy, 88. endowment policies, 89. ment insurance, 90. IX.-INSTALLMENT POLICIES
Premiums charged for Functions of endow-
The fundamental purpose of installment insur- ance, 99. Ordinary installment policies, 100. Survivorship-annuity policies, 101. Continuous- installment policies, 102. Advantages of the con- tinuous-installment plan, 103. Guaranteed inter- est bonds, 106.
X.-OTHER LEADING TYPES OF CONTRACTS .
Joint-life policies, 108. Premiums on joint-life policies, 108. The use of a joint-life policy com- pared with the use of separate policies on the same lines, 110. Annuities, III. Immediate an- nuities and their advantages, 112. Other types of annuities, 114.
THE SCIENCE OF LIFE INSURANCE
XI. THE MEAsurement of RISK IN LIFE INSURANCE, by Bruce D. Mudgett. The theory of probability, 119. The laws of probability, 120. The use of this theory to fore- cast future events, 123. Accuracy of the theory of probabilities-the law of average, 124. Mor- tality tables, 129. Sources of mortality tables, 130. Objection to tables based on population data, 130. Description of a mortality table, 131. Construction of the mortality table, 134. Kinds
of tables and important tables used in the United States, 136. Application of the theory of proba- bilities to the mortality table, 137.
XII. FUNDAMENTAL PRINCIPLES UNDERLYING RATE- MAKING, by Bruce D. Mudgett .
Features peculiar to life insurance, 140. As- sumptions underlying rate computations, 142.
XIII. THE NET SINGLE PREMIUM, by Bruce D. Mudgett . . 148 Classification of premiums as single and periodic, 148. Classification of premiums as net and gross, 148. Term insurance, 149. Whole-life insur- ance, 154. Pure endowments, 158. Endowment insurance, 159.
XIV. THE NET SINGLE PREMIUM (continued), by Bruce D. Mudgett . .
Installment insurance, 161. Annuities, 164. Deferred annuities, 168.
XV. THE NET LEVEL PREMIUM, by Bruce D. Mudgett
The level, or periodic, premium system, 174. Analogy between periodic premiums and annui- ties, 175. Continuous and limited premiums, 177. Computation of the net annual level pre- mium, 178. Premiums paid at intervals of less than one year, 185. Return-premium policies, 187.
XVI. THE RESERVE, by Bruce D. Mudgett.
Financial importance of the reserve, 191. The origin of the reserve, 192. Definition and pur- pose of the reserve, 192. Method of calculating the reserve, 196. Comparison of reserves on dif- ferent interest bases and on different policies, 204.
XVII. THE GROSS PREMIUM-LOADING, by Bruce D. Mudgett .
Classification of expenses, 210. The problem of equitable distribution of expenses, 212. Methods of loading, 214. Loading and the incidence of expense, 219.
XVIII. SURRENDER VALUES AND POLICY LOANS . Meaning of the term surrender value," 229. Extent to which policies are lapsed and surren- dered, 230. Non-forfeiture laws, 231. Liberal- ity of companies in the granting of surrender values, 233. Reasons justifying a surrender charge, 234. Various optional forms in which surrender values are granted, 237. Development of policy loans, 238. Nature of policy loans as now granted, 239. Advantages resulting from the loan privilege, 240. Extent of policy loans and the relation of such loans to lapses and sur- renders, 241.
Meaning of surplus and sources from which de- rived, 245. Gain from investment earnings, 246. Saving from mortality, 246. Saving from load- ing, 247. Gains from forfeitures, 248. Methods of apportioning the surplus, 249. Meaning of the terms "divisible surplus" and " dividends," 251. Methods of distributing the surplus according to the time of distribution, 252. How dividends may be used, 255.
SPECIAL FORMS OF LIFE INSURANCE XX. FRATERNAL AND ASSESSMENT INSURANCE .
Extent of fraternal insurance, 261. Organiza- tion, government, and legal status of fraternal
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