ON LIFE INSURANCE AND YITAL STATISTICS. 
277 
sibility and divide the profits, in proportion to the capital they 
invest. 2nd, “ Mutual ” offices, where the insurers guarantee 
each other to the extent of their funds , and share the profits at 
given periods, either in the form of a bonus , or by reducing the 
annual premium, or making addition to the sum payable at 
death. 3rd, “ Mixed ” offices, in which the assured participate 
largely in profits, but have proprietary capital to fall back upon. 
The general weight of testimony is in favour of the last system, 
for these offices are able to declare larger bonuses than the 
Mutual ones, and the cost of a guarantee fund to the assured is 
not large. The profits on life assurance depend much upon, — 
1st, economy and good management; 2nd, a careful selection of 
healthy lives, so that the real result exceeds the calculated 
average; 3rd, the prudent investment of funds at interest 
exceeding three per cent. But to accomplish this there are 
delicate problems to solve : such as— the selection of lives ; the 
determination of what amount of stock should be kept in 
reserve, to meet payments at a distant date; the amount 
required to guarantee perfect safety; the mode of ascertaining 
what surplus should be equitably divided, and what proportion 
should be divided between share and policy holders ; and the 
adjustment of expenses to income. All these are matters which 
relate to the finance of life assurance , demanding skill and 
experience in this kind of business. 
Although, as we have stated, life assurances are calculated 
upon the average expectation of persons in the whole commu- 
nity, yet the selection of lives is necessary to protect the offices 
from fraud, and to render the class of assured lives better than 
the general average. 
A medical examiner, acting for the interest of the company, 
detects the existence of diseases that tend to shorten life. The 
duty of these medical experts is to detect those diseases which 
bring about an early emergence from the ranks of life; for, 
although all must die, the great object of a company is to 
exclude all those who are likely to die quickly. No company 
could realise any profit where the real expectation of life in the 
assured fell much below the calculated expectation, and where 
many short-lived persons were permitted to enter. 
In the selection of lives, Dr. Mann observes, in one of his 
contributions to the medical statistics of life assurance, that it 
is of grave importance to be familiar with the waves that rise 
and fall below the dead level in the ocean of life, for it is in 
these stormy latitudes that the path of their voyage lies. 
What specially demands medical attention are facts relating 
to the family history, inasmuch as they, more than any other, 
throw most light upon the probability of latent disease likely to 
shorten life. Suspicious lives are those who show hereditary 
