Furnishes Permanent Protection at the Smallest Initial Outlay

As has been aptly stated "the ordinary life policy is of all policies the one which gives the maximum of permanent protection at a minimum annual charge". This may be illustrated by comparing the gross premium charged by companies for ordinary life policies with those required under the limited payment and endowment plans. For instance, the annual premium charged by a certain company per $1,000 of ordinary life insurance is $19 at age 25, $21.80 at age 30, and $25.45 at age 35. On a twenty-payment life policy at the same ages the annual premiums charged by this company are $26.75, $29,70, and $33.28; while on an endowment policy, maturing in twenty years, the premiums are respectively $44.82, $45.63, and $46.70. It is therefore seen that the ordinary life policy furnishes permanent protection at the smallest initial outlay, although, as will be shown later, the limited-payment and endowment policies will, if the insured continues to live, ultimately yield certain advantages which probably induced the insured to prefer these forms and which will compensate for the higher premium. In case of early death, however, the insured would realize the same amount under each of the aforementioned policies, yet the outlay on the part of the insured would have been considerably greater under the limited-payment and endowment plans than under the ordinary life policy.

Owing to its moderate annual cost; an ordinary life policy tends to bring adequate protection within the reach of nearly all. It is particularly well adapted to those whose income is small and who find desirable a considerable amount of permanent protection. To the rich man, on the other hand, the policy affords ample protection and enables him to use any surplus money to better advantage probably than if allowed to accumulate with an insurance company. The policy is also well adapted to persons who, although having passed middle life, may still desire the largest amount of permanent protection at the lowest cost. Even at ages 45 and 50 the annual premiums charged by the aforementioned company are, respectively, only $36.50 and $45.10; while for a twenty-payment life policy at the same ages the premiums are $43.46 and $51.26, and for an endowment policy, maturing in twenty years, $51.45 and $56.55.