318 FARM MANAGEMENT 



insurance company at 5 per cent. There is not much 

 profit in investing money with a life insurance company 

 at 3 per cent and borrowing it back at 5 per cent, as is some- 

 times done. 



The best form of life insurance for the man who has a 

 good safe way to invest money is the ordinary life policy. 

 One may then expect to be able to continue to pay the pre- 

 miums after the twenty years, but even if he is so unfor- 

 tunate that he has to stop payment the policy will go on 

 at about half its face value. 



203. Typical results with different policies. A definite 

 example will illustrate the merits of the different policies. 

 The following are the rates of the Connecticut Mutual 

 Insurance Company for a man twenty-five years of 

 age: 



A ten-year renewable term policy for $1000 costs $14.93 

 a year. After the first year the dividends reduce the 

 amount to be paid by about $1 .50. At any time during the 

 ten years the policy can be changed to some other form of 

 policy by making proper payments. At the end of ten 

 years the rate is raised. This policy is little used. It is 

 adapted to the single condition where one needs more in- 

 surance than can be paid for in another form of policy and 

 expects later to drop it or to have more money so that it 

 can be changed to another form of policy. 



An ordinary life policy for $1000 at the same age, 25 

 years, costs $20.14 a year. At the end of twenty years 

 such a policy has a cash surrender value of $230.50, or if 

 payment of premiums is stopped there is a paid up insur- 

 ance value of $457 at no farther cost. The amount to be 

 paid is reduced by the annual dividends. These dividends 

 reduced the actual amount paid for such a policy taken out 

 twenty years ago to $315.44. 



