Life Insurance

The preparation of this text was undertaken at the suggestion of the National Association of Life Underwriters. In making the suggestion, the Association was actuated by the desire for a comprehensive textbook adapted to the needs of classroom instruction for beginners of the study of life insurance in colleges and high schools; one which would also serve as a clear and simple exposition of the subject for laymen and life insurance solicitors. To fulfil this purpose it has been the author's object to bring together in compact and classified form the essential facts, principles and practices of the life-insurance business, and to present them in a simple and untechnical manner. The book does not attempt to discuss the highly technical aspects of the business, such as the specialist may desire; instead its purpose is to treat comprehensively those phases concerning which the average student, layman and solicitor should be informed in order to have a clear understanding of the nature of life insurance and the family, personal and business uses to which it may be put.

The thirty-two chapters of the text have been grouped into five distinct parts, dealing respectively with the "Nature and Uses of Life Insurance," the "Science of Life Insurance," "Special Forms of Life Insurance," the "Organization, Management and Supervision of Legal Reserve Companies" and "Important Legal Phases of Life Insurance." The first part of the volume is devoted to a discussion of the practical uses to which life insurance may be applied. Separate chapters are devoted to each of the leading types of policies sold, with a view to giving a detailed analysis of the contracts and an extended statement of the advantages and disadvantages connected with their use under various circumstances. Special effort has been made to write and illustrate this part of the volume in a manner so simple as not only to adapt it for collegiate purposes, but to make it suitable also for classroom instruction in commercial and high schools. Life insurance, so vitally affecting nearly every man and woman in the community and so intimately related to the welfare of the masses, should find some place in the curriculum of our high schools. The courses offered must necessarily be simple and untechnical, and may be restricted advantageously to an explanation, chiefly by way of detailed illustration, of the reasons why it is a duty to insure under certain circumstances, the practical uses to which life insurance can be put, the distinctive features of the main types of policies, and the advantages or disadvantages of each under certain circumstances. For these reasons it is believed that the first ten chapters of the book will lend themselves readily and advantageously to use in high schools, commercial schools and similar institutions.

Part Two of the volume deals with the scientific phases of life insurance and its chapters present the essential considerations connected with the measurement of risk, the principles underlying rate-making, the net single premium, the net level premium, the reserve, loading, surrender values, policy loans, and surplus. For beginners in the subject this phase of life insurance is necessarily the most difficult to understand and appreciate. Every effort has, therefore, been made to emphasize the importance of these aspects of the business and to explain them in a simple manner. Having in mind again the layman, the student, and the average solicitor, this part of the volume is as untechnical in character as possible and only simple mathematics has been used to make clear the scientific foundation that underlies correct principles. Furthermore, the examples used to illustrate these principles are fully stated, and special emphasis has been given to the proper classification of the respective topics so as to assist the student in grasping the subject.

I wish to acknowledge my indebtedness to the many officials of insurance companies who have shown me the utmost courtesy in meeting my requests for explanation of the office and field practices followed by their companies and for forms, data, printed circulars and other information. Special acknowledgment is due to my colleague, Dr. Bruce D. Mudgett, Instructor in Insurance at the University of Pennsylvania. Not only did Dr. Mudgett write the first seven chapters of Part Two of the volume, dealing with the science of life insurance, as well as the chapter on disability insurance, but, throughout the preparation of this volume, he has generously given me the benefit of his advice and criticism. He also read all of the proofs.

S. S. HUEBNER.

University of Pennsylvania

LIFE INSURANCE

A TEXTBOOK

BY

SOLOMON S. HUEBNER, PH.D.

PROFESSOR OF INSURANCE AND COMMERCE, WHARTON SCHOOL OF FINANCE AND COMMERCE, UNIVERSITY OF PENNSYLVANIA

ENDORSED BY THE EDUCATION AND CONSERVATION UREAC THE NATIONAL ASSOCIATION OF LIFE UNDERWRITERS

NEW YORK AND LONDON

D. APPLETON AND COMPANY

1921