274 ESSAY ON PROBABILITIES. 



hitherto experienced. Certain limits may be obtained,, 

 which may sometimes serve as a useful check. 



Perhaps the average age of admission to an insurance 

 office is about 40, as many entering younger as older. 

 The average premium charged by the offices at that age 

 is 3'26/. per cent. Now the most extreme supposition 

 which can be imagined in favour of the insured is, that 

 the Carlisle table should be taken as the law of mortality, 

 and 4 per cent, as the interest of money. Upon these 

 suppositions, the accumulations of the office would 

 amount, upon a premium of 3*26/., at the death of 

 parties aged 40, one with another, to 13?^. But this 

 pushes every favourable supposition to its extreme, and 

 moreover allows nothing for expenses of management. 

 I am inclined to think, however, that the usual pre- 

 miums will, as long as the rate of mortality continues at 

 its present amount, yield about 1251. for 1001. nominally 

 insured, and perhaps something more. 



It must not be left out of sight, that the offices con- 

 sider every person as having the age which he will attain 

 at his next birth-day. If, for instance, a person who 

 attains 40 years of age on the 12th of March were to 

 insure his life on the 13th, he would be said to be 41 

 years of age, and would have to pay accordingly. The 

 effect of this very proper * regulation is, that, one party 

 with another, all are half a year younger than their office 

 age. Again, all the tables are computed on the supposition 

 that interest is made yearly, whereas in fact it is made 

 quarterly. Circumstances of this sort, trivial as they 

 appear, do nevertheless produce a sensible effect in a 

 large number of years. To the above we must add the 

 profits arising from the purchase of policies, which is 

 always done by the offices on terms very favourable to 

 themselves ; fines for non-payment of premiums ; the 

 profits of lapsed policies ; and so on. 



Leaving all speculation as to the probable profits, 

 I now proceed to show how to ascertain, from the 



* Proper as long as there is no subdivision of a year. I think the offices 

 might very rationally divide the year into quarters. 



