10 BUSINESS OF LIFE INSURANCE

mace, and especially at the younger ages, would be likely to be persons who were not immediately subject to a nonnal risk of death, because freshly selected by medical examination, American actuaries hold that such a mortality table is not suitable for use in computing rates of premium. For this purpose a table, in order to be safe, should not show a lower mortality than is to be expected on lives, for instance, which are at least five years past the time of examination. Such a table is called an ultimate table, meaning that it represents the mortality fairly to be expected in a well-conducted company upon lives which have reached their ultimate death-rate for the various attained ages. Such a table the American Experience Table is considered to be; and, although not constructed in this manner, the Actuaries' Table fairly fulfills this condition.

By means of these death-rates the actuary can compute the rate of premium necessary to cover the risk of death for a single year. At first sight it would appear that this would also be the increasing annual premium which the company would need to charge year after year to furnish continuous insurance at its current cost so long as is required. Theoretically, this is true, and practically it might stand also for many years. But it would not do permanently, because when the insured lives become old the