Page:The New International Encyclopædia 1st ed. v. 12.djvu/248

* LIFE INSURANCE. 226 LIFE INSURANCE. results were inucli more accurate than those embodied in the Northampton table. The Carlisle table is still used by some English eonipanics. All the tables thus far referred to, as well as others of the same period, were based on the life experience of the general population. The first table which took account only of insured lives was based on the experience of the Kquilable Assurance Society and was published in 1825. (oniparativcly little use has been made of this table, but a similar table, based on the com- bined experience of seventeen Knj;lish life-insur- ance olliees and published in 1.S43, is still used by many Kngllsh companies, and is the author- ized table for the calculation of reserves in most American States. It is variously known as the Actuaries' Table, the Combined Experience Table, and the Seventeen Offices' Talili'. A similar table prepared under the direction of the Institute ot Actuaries from the ex]ierience of twenty Eng- lish and Scotch comiwinies was published in 1800. This table is tending to supplant both the Carlisle and the Combined Ex])crience table in British offices, but has not been officially rec- ognized in any American State. The early American otlices adopted English tables, first the Northampton, later the Carlisle, more recently the Actuaries' or Combined Experi- ence tables. Meantime several tables based on American experience have been worked out, but none of them has come into general use except the so-called 'American Experience' table. This was constructed by Mr. Homans from the experi- ence of the Mutual Life Insurance Company of New York, More elaborate tables have since been worked out, based on the experience of thirty American offices. These deal separately with male and female lives, and correlate mor- tality with place of residence, with cause of death, and with other phenomena. They furnish the, material for much more accurate classifica- tion of risks in life insurance than is now at- tempted, but no company has seen fit to adopt a schedule of premium rates based on the new in- formation. At the present time the two tables iri general use among insurance offices in the United States, and authorized by the insurance depart- ments of the various States for the calculation of reserves, are the English Combined Experi- ence table and the American Experience table. The following tables show the number surviving at the end of ten-year periods out of 1000 living at age ten acconling to the difTerent tables men- tioned above. Eor purposes of comparison data have been added from the mortality table recom- mende<I by a recent session of the National Fra- ternal Congress for the use of fraternal bene- ficiary societies. This table starts with age twenty, and not with age ten, as the other tables do. In order to make a ready comparison pos- sible, the Fraternal table as here given assumes 925 living at age twenty. lioth the Actuaries' and the American tables are known to be too favorable to the insurance companies, that is, to indicate a higher death-rale than actual!}' prevails, and neither of them makes any attempt tu classify risks according to any other factor than the age of the insured. More- over, the numbers for the advanced ages are ba.sed almost entirely on a priori principles, and not on actual observation, since historical data for those ages are very incomjilete. The older in- surance companies, which have done ii large whole-life l>usiness, such as the Presbyterian Min- isters' Fund, tlu' New England Mutual, and the Connecticut Mutual, show a heavy saving over the Actuaries' tables in the later as well as in the earlier years. The following figures are taken from the Actuaries' table of nnutality, and will serve to show the character of a mortality table. The figures from age thirty to age ninety are here condenseil in order to shorten the table. Other columns are often added, such as one giv- ing the per cent. <if deaths each year to the living at the beginning of the year, and one giving the expectation of life at each age. iCTDARlES' Table OP ManTALlTY t. t. t. t. ■SSP Sai II o ffi ft <
 * 5-

-< '^~ 711 35,837 2' 10 100.000 676 22 91,905 866 22,.'j47 U 99,324 674 23 91.219 690, 80 13.290 11,971 12 98,650 672 24 90,629 694 90 1,319 427 13 97,978 071 25 89,835 098 ; 91 892 322 14 97.307 671 26 89.137 703 92 570 231 15 90,636 671 27 88,434 708 93 339 155 16 9J,9«5 072 28 87,726 714 94 184 95 17 95,293 673 29 87,012 720 ; 95 89 62 18 94,620 675 30 86,292 7,639 ' 90 37 24 19 93,945 677 40 78,653 9,136 i 97 13 9 2U 93,268 680 60 69,517 13,544 1 98 4 3 21 92,688 683 «U 55,973 20.136 j 99 1 1 Rate of Discount. Before passing to a con- sideration of the method of (U'termining premiuni rates from the mortality tables, attention must be called to one other point. As nearly all life- insurance jiolicies are for a number of years, and as during those years the insurance company is gradually accumulating a fund from the insured to be used in paying the indemnitj- when it be- comes due, it is necessary to make allowance for the interest which the company will receive on these funds while they are in its possession. Even in the case of annual insurance, actuaries always assume that payments to the company are to be made at the beginning of the year, and payments by the company at the end of the year. In cal- culating premium rates, therefore, interest for one year on the premium is assumed. Xet premiums are the premiums based on the mortality tables alone, and are intended to cover merely the mortuary losses of the company. Actual premiums contain in addition an element Number SrRviviso at Differknt .ges According to Different Mortality Tables. AGE Xortllamjiton Carlisle Actuaries' American Fraternal 10 1,000 904 773 641 .503 359 217 83 8 1,000 943 873 786 6,S1 504 372 148 22 1,000 933 863 7S7 695 .500 358 133 13 1,000 926 S64 781 698 579 386 145 8 20 «, 925 878 30 40 • 826 50 756 60 . . ^6 70 456 80 90