FINANCE, INDUSTRY, TRANSPORTATION. 



471 



When a policy is terminated at the option of 

 the company, a ratable portion of the premium 

 is refunded for the unexpired term. 



Life Insurance. In ordinary life poli- 

 cies a certain premium is to be paid every year 

 until the death of the insured, when the policy 

 becomes payable to the beneficiary. There are 

 other kind of policies, however, and these are 

 described below : 



Limited Payment Life Policy. Conditions: 

 Premiums to be paid annually for a certain 

 fixed number of years, or until the death of the 

 insured, should that occur prior to the expira- 

 tion of this period. Policy payable at death 

 of the insured. Advantages : Payments on 

 this kind of policy may all be made while the 

 insured is best able to make them, and if he 

 live to an old age, the policy will not be a con- 

 tinual burden, but will rather be a source of 

 income, as the yearly dividends may be taken 

 out in cash or added to the amount of insur- 

 ance. 



Term Life Policy. In this method of insur- 

 ance, the insurance company agrees to pay to 

 ihe beneficiaries a certain sum on the death of 

 the insured, should that event occur within a 

 fixed term. 



Endowment Policy. A combination of a 

 Term Policy and a Pure Endowment. These 

 policies are issued for endowment periods of 

 10, 15, 20, 25, 30, or 35 years, and may be 

 paid up by a single payment, by an annual 

 premium during the endowment period, or by 

 five or ten annual payments. Conditions: 1. 

 Insurance during a stipulated period, payable 

 at the death of the insured, should that event 

 happen within said period. 2. An endow- 

 ment of the same amount as the policy, paya- 

 ble to the insured, if still living at the end of 

 the period fixed. Advantages : Limited term 

 of payments ; insurance during the time when 

 the death of the insured would cause most em- 

 barrassment to his family ; provision for old 

 age, as the amount of the policy will be paid 



to the insured if still living, at a time when 

 advanced age may make it of great benefit. 



Annuity Policies are secured by a single cash 

 payment and insure the holder the yearly pay- 

 ment of a certain sum of money during life. 



Joint Life Policy An agreement to pay a 

 certain sum on the death of any one of two or 

 more persons thus insured. 



Non-forfeiting Policies do not become void 

 for non-payment of premiums. In some com- 

 panies all limited- payment life policies, and all 

 endowment policies, after premiums for three 

 (or two) years have been paid, and the origi- 

 nal policy is surrendered within a certain time, 

 provide for paid-up assurance for as many parts 

 of the original amount assured as there shall 

 have been complete annual premiums received 

 in cash by the company. Some companies 

 voluntarily apply all credited dividends to the 

 continuance of the insurance. Others apply 

 the legal reserve to the purchase of term insur- 

 ance at regular rates. 



Special Forms. The Reserve Endowment, 

 Tontine Investment, and other special policies 

 guarantee to the holder a definite surrender 

 value at the termination of certain periods. 

 The surrender value of a policy is the amount 

 in cash which the company will pay the holder 

 of a policy on its surrender the legal reserve 

 less a certain per cent, for expenses. 



The Reserve of life insurance policies is the 

 present value of the amount to be paid at dearth, 

 less the present value of all the net premiums 

 to be paid in the future. 



The Reserve Fund of a life insurance com- 

 pany is that sum in hand which, invested at a 

 given rate of interest, together with future 

 premiums on existing policies, should be suf- 

 ficient to meet all obligations as they become 

 due. It is the sum of the separate reserves of 

 the several policies outstanding. 



Marine and Transit Insurance. In- 

 surance of vessels and their cargoes against 

 the perils of navigation is termed Marine In- 

 surance. 



Inland and Transit Insurance refer to insur- 

 ance of merchandise while being transported 

 from place to place either by rail or water 

 routes, or both. 



Insurance Certificates, showing that certain 

 property has been insured and stating the 

 amount of the insurance and the name of 

 the party abroad who is authorized to make the 

 settlement, are issued by marine companies. 

 They are negotiable and are usually sent to the 

 consignee of the merchandise to make the loss 

 payable at the port of destination. 



The adjustment of marine policies in case of 

 loss is on the same principle as the adjustment 

 of fire policies containing the ' < average clause. ' ' 



