9

SOME FEATURES, PECULIAR TO LIFE IN-SUTRA CE.

The contract of insurance is called a policy. The word is from the Italian word for a lottery ticket. The monetary consideration for the insurance is called a premium, which is a Latin word, meaning bonus or prize.

The fixing of rates of premium in all branches of insurance was at first necessarily pure guess-work. In some cases, fortunately-, the rates were guessed high enough or too high, in which latter case nothing was required but to adjust the premiums suitably, and there was no interruption of the successful course of the business. In other cases, the first rates were guessed too small, and, such is the perversity of human nature, the displeasure and distrust of men were visited on those forms of insurance, instead of merely upon the poor guessing. This was because failure attended the first companies that essayed such branches of insurance.

Life insurance premiums, fortunately, were guessed high enough by the first regular company that under-took whole life insurance for a level premium. On the contrary, the prices of annuities for life were guessed too low; and, if the institutions guaranteeing them had not been life insurance companies, with profits to offset annuity losses, and solvent governments, the sale of annuities would doubtless have been seriously checked. The rates for sickness or health insurance—it is known