FUNCTION OF INSURANCE   3

1IOLCOMBE, J. M., FUNCTION OF LIFE INSURANCE, CHAP. Iti, ZART-
MAN & PRICE. YALE READINGS IN INSURANCE   AND
ACCIDENT) (2D ED. 1913) pp. 43 TO 50, 52.3

* * * It would not be difficult to enumerate many lives which cannot be considered of any pecuniary value, because, for various reasons, they produce nothing. Such are those of the very old, the imbeciles, and the confirmed invalids. But the life of every man who earns more than suffices for his actual personal expenses is of pecuniary value to some one besides himself. This has been recognized from early times in the institution of slavery, which was based on the principle that the ownership of the services of a human being had a value in accordance with the excess of earnings obtainable above the necessary cost of subsistence. When a slave was purchased as an investment, he was examined in order that the state of his health and his muscular development might be known. These qualities, in connection with his age, his skill in any variety of labor, and his disposition, determined the price at which he seemed likely to be a profitable investment. A carpenter or blacksmith was worth 50 per cent more, other things being equal, than an ordinary field hand, because, while the cost of his support was no greater, the quality of his service was much more valuable. In any case, however, certain important elements were either wholly lacking or but partially developed. "A person who can acquire no property can have no other interest but to eat as much and to labor as little as possible."

Family ties are needed to develop the highest value of a human life. But while this value thus reaches its greatest capacity, there devolves upon its possessor the responsibility of supporting those who have by his own choice and act the right to depend upon him for the necessities of life. The family, then, has a clear and indisputable interest in his earnings. This they have day by day, month by month, and year by year. If he dies possessed of property, this by right goes to them, in order that they may, so far as its income may enable them, continue to defray the cost of existence.

But what of the life itself? Has it a value beyond what it produces in a month or a year which can be measured with any degree of accuracy? Supposing its possessor to be of good constitution and free from hereditary taint, it has already been shown that he and others of his class will be governed, as to the length of their lives, by a law of mortality so certain that their average lifetime may be measured with as much precision as that which governs any series of future events. For example, a man is thirty years old, in good health, and his surplus earnings are 1.500 a year, and money is worth 4 per cent. per annum: by a standard mortality table, the present value of the future surplus earnings of this life is .25,560.

3 Reprinted with the permission of the publishers, Yale University Press.