It is true that the advantage or benefit of insurance does not consist in
adding anything to the wealth of a company, but only consists in drawing
from the premiums paid into its treasury by the policy holders generally,
to meet each death claim which arises; or can only be called an _advantage
of distribution_, or process of collecting aid from the living members, to
assist the representatives or dependents of the deceased ones; but it is
not the less on this account an advantage worth _same expense_ in
securing.
(2) Interest realized by the investment of premium while it is in the
keeping of a company is an advantage; in every sense so, since it comes
wholly from outside sources, and accrues proportionally to all members; it
may be called, as above, the investment advantage, and of course justifies
some _expense_ to secure it.
Hence the expenses incurred by any company in a given; time must be
divided into two parts, one being the expense incidental to insurance, and
the other that incidental to investment, which parts are to be compared
respectively with the insurance claims met, and interest receipts of the
company for the same time; or what is equivalent in the latter case, the
net rate of interest earned after deducting the incidental investment
expense may be found.
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