POPULATION POOR-LAWS LIFE-ASSURANCE. 



persons, of a particular age, will die within next 

 year, how many in the second, how many in the 

 third, and so on. The medium or average gives 

 what is called the expectation of life for each per- 

 son of the set. A certainty, in short, is attained 

 on this proverbially uncertain subject, when we 

 take a great number of persons, and consider 

 them with regard to the circumstances in which 

 they live. It is found, for instance, that of 100,000 

 persons, aged 52, residing in this country, the 

 number who will die before another year has 

 elapsed will be about 1521, or rather more than 

 one and a half per cent. Supposing that these 

 100,000 persons were to associate for the purpose 

 of making sure that the widows or other heirs of 

 all those who died within a year should have 

 .100 ; it would be necessary, in that case, for 

 each person to contribute as much to a common 

 fund as would make up ,152,100, or a hundred 

 times 1521 ; that is to say, each would have to 

 pay in 1, IDS. 5d. It is clear that those who 

 died, or their heirs, would profit to the extent of 

 ^98, 95. 7d. ; but without injury to those who sur- 

 vived, since these also had their chance of gain- 

 ing, for which it was but fair that they should 

 pay. This would be a simple transaction in life- 

 assurance, and may serve to convey an elementary 

 idea of what life-assurance is, though in practice 

 the transactions are usually of a somewhat more 

 complicated kind. 



Life-assurance is effected in this country either 

 in offices established by joint-stock companies, 

 who look to making a profit by their business, or 

 by mutually assuring societies. The former are 

 shortly called proprietary, and the latter mutual 

 offices. Offices of the first kind are usually held 

 by a joint-stock copartnery, with a large sub- 

 scribed capital ; and the chief advantage which 

 they hold forth is the security they offer in their 

 capital and in the responsibility of their share- 

 holders. An estimate of the value of the insurance 

 policies is made periodically, and is compared 

 with the value of the securities of the company, 

 apart from those representing the paid-up capital. 

 The surplus is paid in dividends to the share- 

 holders, a portion being generally put aside as a 

 reserve fund. The insuree incurs no responsi- 

 bility, and has no voice in the management. In 

 mutual societies, the insurees are partners, and 

 when insured to a certain amount, have a control 

 in the management. The office is an association 

 of customers, each insuring his neighbour. All 

 surplusages, instead of being in the hands of a 

 trading company, remain the property of the 

 insurers, divisible among them proportionally. 

 The members appoint directors. Besides the net 

 annual premium, to cover the risk, the insuree is 

 charged with an additional percentage, which, if 

 the society is successful, is returned to him in 

 various forms, but generally as a bonus, or further 

 insurance on his life. Each insuree is a share- 

 holder, who engages to pay a given call on his 

 share at the beginning of every year, and receives 

 the returned investment and its profits at his 

 death. Mixed societies are companies dealing 

 partly on the proprietary, partly on the mutual, 

 principle. They are managed exclusively by the 

 shareholders, but the insurees participate in the 

 profits of the company as much as four-fifths of 

 the profits, after deducting the expense of manage- 

 ment, being in several offices divided among them. 



THE RATE OF MORTALITY. 



The rate of mortality and the rate of interest 



are the two principal data on which life-assurance 



practically depends. Mortality tables are con- 



| structed either by comparing the number of 



i deaths at each age with the number living at 



i that age, or by comparing the number of deaths- 



at the several ages with each other. From the 



data thus supplied by experience, is deduced 



what is called the 'Expectancy of Life' at each 



several age. 



The tables of mortality adopted in this country 

 as the basis of calculation for assurance com- 

 panies are various. That known by the name of 

 the Northampton Table is the oldest now in use. 

 It is founded upon observations made by the cele- 

 brated Dr Price, of the deaths registered for the 

 population of one of the parishes of the town of 

 Northampton, during the years between 1735 an( i 

 1780. This table, it is now acknowledged, shews 

 far too high (or rapid) a rate of mortality, owing 

 partly to no allowance being made for fluctuations 

 in the population of that parish, from immigration 

 and other such causes ; partly to the great im- 

 provement which has taken place in the value of 

 life since the middle of last century, consequent 

 upon the introduction of vaccination and other im- 

 provements in medical science, as well as in the 

 habits and modes of living of the people ; and 

 partly to the erroneous graduation adopted by 

 Dr Price. 



The Carlisle Table was formed, not from .the 

 register of burials among a floating population, 

 but from observations of the deaths which 

 occurred, at each year of life, among a certain 

 stated number of persons in the town of Carlisle. 

 The observations were conducted by Dr Hey- 

 sham, and the calculations made in the most 

 scientific manner by Mr Joshua Milne, author of 

 a valuable work on Annuities. 



Tables known as the Government Tables were 

 compiled from observations on the progressive 

 mortality occurring among the government an- 

 nuitants and other selected classes, distinguishing 

 the sexes. They were prepared, under the direc- 

 tions of government, by Mr Finlaison, actuary to 

 the National Debt ; and in 1829 were adopted by 

 parliament as the basis upon which their future 

 calculations should proceed. Mr Finlaison's 

 researches established the fact of the longer 

 duration of female life. He also observed a ' very 

 extraordinary prolongation of human life ' in the 

 course of the time over which his inquiries ex- 

 tended so great, ' that the duration of existence 

 now, as compared with what it was a century ago, 

 is as 4 to 3 in round numbers.' 



A table was framed by Mr Griffith Davies from 

 the deaths reported from time to time among the 

 members insured in the Equitable Life Society 

 of London from its commencement in 1762 down 

 to 1829, which has since been recalculated and 

 continued down to a later period by Mr Morgan, 

 the actuary to that society. This table is very 

 valuable, as confirming the substantial accuracy 

 of other observations, with which it very nearly 

 corresponds. 



Finally, Dr Farr constructed a mortality table 

 based on the deaths registered in England and 

 Wales in 1841, and the number and ages of the 

 population as given by the census of that year. 



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