TIIE EVOLUTION OF POLICIES 199

chase paid-up insurance or a life annuity, or to withdraw the same in cash.

Applicants are frequently misled by the quotation of results, including surplus accumulations, of such policies, into supposing that a twenty payment life policy or even a whole life policy, with a twenty-year surplus period, is a twenty-year endowment. Under such policies the guaranteed cash value at the end of twenty years is merely the reserve for the twenty payment policy or the life policy as the case may be, always much less than the face of the policy, and the remainder of the total cash value quoted is surplus which may have been realised in the past, but is no earnest for the future, while a twenty-year endowment policy yields a guaranteed return of the face of the policy, besides all the surplus. Purchasers should carefully distinguish, therefore.

The deferred surplus plans, as applied to endowment policies with the same periods, reverse the life insurance before the periods are completed. That is, there will be a loss instead of a gain to the beneficiary because of the policy on account of the death of the insured during the last year of the period. For, suppose that $300 surplus per $1,000 has been realised and will be payable if the insured survives the twenty years and maintains the policy in force; plainly, if he should die during the twentieth year, after the

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