PRESENT PROBLEMS IN INSURANCE 243 



mortality. Whether this margin of approximately 20 per cent is neces- 

 sary in the interests of safety must be left to the actuaries. There are 

 those who believe that so wide a margin is not necessary; and if 

 the fraternal societies, by means of the homogeneity of their mem- 

 bership and the care of selection, can effect much more favorable 

 experiences, so much the better for them. Great credit is due to 

 the Actuarial Society of America for conducting the mortality inves- 

 tigation designed to show the actual risk incurred, on the basis of the 

 past experience of the companies included in the investigation, in 

 case of certain classes of policy-holders. This investigation has not 

 only contributed to the greater accuracy of mortality statistics, 

 but it has emphasized the relative degrees of healthfulness of certain 

 employments, occupations, and habits of life, and thus it may exert 

 a powerful influence upon the conditions under which men live and 

 do their work. The investigation suggests the possibility of separate 

 mortality tables for each important occupation, profession, or trade, 

 with corresponding differences in the rates of premium charges, 

 although the practical difficulties involved in the administration of 

 the various classes may be insuperable. Perhaps this question should 

 be excluded entirely from the scope of the present paper and con- 

 signed to the borderland between insurance and speculative philo- 

 sophy. Equality of treatment among policy-holders cannot exist 

 where men live under widely different sanitary and industrial condi- 

 tions. It is in the interests of correct habits of life and wholesome 

 surroundings that a special mortality rate be established for the 

 greatest possible number of classes. It will then also be easier to 

 deal equitably and intelligently with the problems of the sub-standard 

 and special risks, and the insurance of women. All these classes 

 must be dealt with if insurance is to become, as it seems it should, an 

 all-inclusive institution. 



The inequality among policy-holders due to different habits of 

 life and conditions of employment suggests another source of in- 

 equality, namely, the inequalities in the proportion of the total risks 

 assumed and benefits received arising from the different amounts 

 of insurance carried by policy-holders in the same company. A 

 single risk of a hundred thousand dollars is a very different thing 

 from one hundred risks of one thousand dollars each. It has been 

 ascertained that there are forty persons in the United States who 

 carry more than $500,000 of insurance. A company composed 

 exclusively of policy-holders who carry, say, $500,000 each, if large 

 enough to enable the law of average to operate, would be perfectly 

 equitable and safe. But no one will claim that forty is a number 

 sufficiently large for the application of the law of average. Since 

 these forty are scattered among different companies, the inequalities 

 resulting from such abnormally large policies become even greater. 



