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
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