CHAMBERS'S INFORMATION FOR THE PEOPLE. 



This table closely agrees with another founded 

 on the same census, and the deaths in the seven 

 years 1838-44 ; also with tables based on the 

 mortality returns of later years. 



The relation of these tables to each other is 

 shewn by the following table of the mean expect- 

 ancy of life at every fifth year of age within the 

 ordinary insurable age, 20 to 60 : 



Until recently, the Carlisle Table was much used 

 as a basis for the calculations of insurance com- 

 panies. Within the ages 20 and 60, it occupies a 

 mean place between the male and female observa- 

 tions in the table of the government annuitants, 

 and nearly coincides with the experience of the 

 Equitable Society. Compared with the tables of 

 Dr Fair, the expectancy of life of the Carlisle 

 Table within these ages is considerably greater, 

 the average of the Carlisle Table being slightly 

 above the extreme column applicable to female 

 life in Fair's calculations. In lives above 60 

 years of age, the disparity increases still more. 

 The circumstance which probably has served to 

 counterbalance this error in the Carlisle Table is, 

 that insurance is commonly effected on selected 

 lives that is, on lives of persons less exposed 

 than others to causes tending to shorten life, and 

 on lives which, on medical inspection, are ascer- 

 tained to Ise sound. The Carlisle Table is now 

 being superseded by the mortality experience of 

 life assurance companies, collected by the Insti- 

 tute of Actuaries, and published in May 1869, 

 exhibiting certainly the most correct standard of 

 assured life in this country, and possessing, by 

 reason of the great skill with which it has been 

 graduated, a complete adaptation for all practical 

 purposes. 



THE RATE OF INTEREST. 



The rate of interest signifies the rate at which the 

 yearly premiums may be expected to be improved. 

 This subject is one which does not admit of the 

 same comparative certainty as the other, and on 

 which, accordingly, there may be great differences 

 of opinion. In 1829, Mr Finlaison wrote : ' I take 

 it for granted that it will be considered safe 

 enough to assume that money, in a long course of 

 years, will so accumulate, through all fluctuations, 

 as to equal a constant rate of 4 per cent ; be- 

 cause, in point of fact, money has hitherto accu- 

 mulated at 4^ per cent, whether we reckon from 

 1803 or from 1783.' Other writers, again, and 

 among them the late Professor De Morgan, 

 looking chiefly to the high price of the 3 per cents, 

 of late years, maintain that not more than 3^ per 

 cent, should be counted on. Practically, the in- 

 vestments of assurance-offices are made on terms 

 much more favourable. Most of them state that 

 their funds are invested ' about,' ' at,' or ' above ' 5 

 per cent Indeed, it is not conceivable that the 

 offices could make such large returns to proprietors 



510 



and members, in the shape of dividends and 

 bonuses, if they did not generally improve money 

 at about the rate last mentioned. At the same 

 time, it would be unsafe to assume for the calcula- 

 tions of life-assurance a higher rate than those 

 specified by Mr Finlaison and Professor De 

 Morgan. 



EXAMPLE OF LIFE-ASSURANCE CALCULATION. 



According to the old Northampton Tables, out 

 of every 11,650 persons born alive, there will be 

 46 living at the age of 90. From these tables 

 being ascertained to be unfavourable to life, this 

 must be understood as not strictly the case, but it 

 may be adopted for the sake of illustration. The 

 same tables make it appear that, of the 46, 1 2 will 

 die in the course of the first year, 10 during the 

 -second, 8 during the third, 7 during the fourth, 5 

 during the fifth, 3 during the sixth, and the last 

 remaining life will fail in the course of the seventh 

 year. It is a favourite mode of exemplifying life- 

 assurance calculation, to suppose these-46 persons, 

 aged 90, associating for the purpose of assuring 

 ^ioo to each at death. They are supposed to 

 proceed upon the principle of paying all that is 

 required in one sum at first, thus forming a fund 

 which is to answer all the demands which are to 

 be made upon it. In this calculation, the improve- 

 ment of money has been assumed at 3 per cent. 

 The object is to ascertain what sum, by way of 

 present payment, each is to contribute to the fund, 

 so that it may discharge ,1200 the first year, 

 jiooo the second, .800 the third, and so on. In 

 order to discharge 



f, s. d. 



1200, at the end of the first^ 1200, discounted at 3^ 



year, the society must >- percent, for one > 1165 i o 

 be provided with ) year, ) 

 1000 at the end of ad year, 1000, ditto, for 2 years, 942 12 o 

 800 n 3 d ii 800, ii 3 732 2 o 

 7o ii 4th ii 700, n 4 t, 621 18 7 

 500 n 5 th ,, 500, 5 431 6 o 

 3o _ ii 6th ii 300, n 6 ii 251 5 o 

 And in order to discharge the remaining .100 at the end 

 of the seventh year, with jioo, discounted at 3 per 

 cent, for seven years 81 6 3 



Ina11 4*25 10 9 



This, divided by 46, gives .91, 173. 2d. as the 

 sum (technically called premium} which each 

 person would need to pay in at the foundation of 

 the society. And this sum of ,91, 175. 2d. is the 

 present value of a re-version of ^ioo, at the age of 

 90, according to the Northampton Tables, and 

 taking interest at 3 per cent 



