268 



ESSAY ON PROBABILITIES. 



is accompanied by this inconvenience, that the measures 

 adopted, whether of precaution or remedy, may be made 

 to press unequally upon the different classes of insurers. 

 If we take, for instance, a fixed rate of interest, suffi- 

 ciently below that which can really be obtained, we find 

 that many of those insured must pay their premiums at 

 a time when interest is comparatively higher, and vice 

 versa. With regard to the tables of mortality, most 

 probably (it has always so happened) a table which is 

 generally too high will be unequally too high ; so that 

 some classes of insurers will contribute more largely to 

 the safety fund than others. And even in the distri- 

 bution of the profits, however good the will may be to 

 apportion them duly, there are yet practical difficulties in 

 selecting an equitable method out of those which do 

 not require calculations of insupportable minuteness. 



It will only here be necessary to dwell upon two 

 points, the distribution of the premiums, and the method 

 of appropriating the profits. 



In the last chapter, in speaking of the use of too 

 high a table of mortality, as a safeguard, I was merely 

 considering the collective security of the office. There 

 are two different ways of answering the same end : 

 either by using a table of mortality confessedly too high, 

 or constructing premiums from a true table of mortality, 

 and increasing these by such a percentage as will pro- 

 duce the same receipts to the office. For general security, 

 these two plans are equally good ; but they may produce 

 very different consequences upon the relative state of the 

 members. For instance, the Northampton table, which 

 is the basis of most of those now in use, is certainly, as 

 already noticed, too favourable to the older lives. Mr. 

 Morgan gives the following table *, exhibiting the num- 

 ber who did die, and those who should have died, if the 

 Northampton table had been correct, all in the twelve 

 years preceding 1828. 



* View of the Rise and Progress of the Equitable Society, London, 182S, 

 age 42. 



