II

a chance. Against this it is possible to make an insurance, quite as against any other contingency. That once undertaken, insurance may be furnished for another year if one survives the first, and so on, but not without the limitation that the company must receive an adequate premium for each year of insurance. The risk is an increasing one, converging to certainty; and, when the age which is considered to be the extreme limit of life is attained, the premium must be equal to the amount insured, discounted for one year, if the premium is paid at the beginning of the year and the insurance considered to be payable at the end of the vear.

Hoy, then, do companies supply insurance for the whole of life? And for equal annual premiums or for limited premiums in number and amount or for a single premium, much less in amount than the sum insured? The secret is that the company is the stakeholder as well as one of the bettors. It collects more than is needed to coyer the current risk, and it accumulates the remainder. This diminishes the actual amount to be paid at death out of the contributions of other policies; and, when the extreme age is reached, it produces a sum at the end of the rear sufficient to pay the death-loss, deemed then to be certain. This accumulation is known as the reserve because it needs to be reserved in order that the company can fulfill its obligations : and it was called the "self insurance fund," a self-explanatory name, by the great actuary, Elizur Wright.

Because of these peculiar features of life insurance, the study of life insurance is attended with somewhat greater difficulties than the study of other branches of insurance. The same considerations impelled life insur-