International Styles

The Reserve

One of the most difficult subjects for the layman to understand in connection with the administration of a life-insurance company is the existence of the enormous assets possessed by the different companies and the reasons why these funds must be held. That a single company should hold over half a billion dollars strikes many persons as unnecessary and as an opening to the possible misuse of such funds. The fact is not generally known, or clearly understood, that a major portion of these assets represents liabilities held by the company for its policyholders and subject to call by them at any time upon the surrender of their policies. This portion of the funds is held in trust by the company and is known as the reserve.

Sections in Chapter 16.

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