CONDITIONS OF ASSURANCE. 1695 
determined is the mode in which it shall be distributed amongst the 
assured. 
At the Equitable, Rock, &c., at each period of division the profits 
| are applied in proportion to the amount assured and the number of 
| years the policy has been in existence. This mode of appropriation has 
the effect of giving far more than is just to the old assurers, as a slight 
examination will prove. By referring to the Equitable table of additions, 
we observe that a policy effected in 1776, in consideration of the pre- 
miums received thereon for ten years from 1819, had an addition made 
to the policy of £162: if we suppose the life in his 40th year at the 
= time the insurance was effected, the annual premium received would 
k be £3 8 per cent, which at 5 per cent compound interest, will amount 
to only £42 15 4; while the present value of the bonus, or the sum 
which the office would give in ready money, is £150 11 9. 
A more equitable mode is adopted at some of the other offices. At 
To: the Law Life, Guardian, &c., the amount of premiums received on each 
policy with compound interest is ascertained, also the sum which is to 
ee = be reserved by the company as the value of the policy : the difference 
: between the two is taken, which represents the proportion of profit on 
the policy : then finding the total of the differences for all the policies, 
by a simple proportion the bonus on each policy is obtained, viz. : 
As the total thus found is to the surplus to be divided, so is the 
| sum which represents the proportion of profit on any policy to the 
addition to be made to such policy. 
At the London, London Life, Metropolitan, National, Universal, &c., 
the profits are ascertained annually, and on each policy a certain per 
centage is deducted from the premium next falling due after the valua- 
tion. This system has been generally misunderstood, the reduction 
being supposed constant for the whole of life, whereas at each valuation 
it is declared on the premium for one year only. As the profits of an 
office are pretty steady when it has been some years in existence, the 
annual reductions exhibit greater uniformity than might generally be 
expected. 
CONDITIONS OF ASSURANCE. 
On making a proposal, the party to whom the policy is to be granted 
a warrants the life proposed to be in good health, not afflicted with any 
; disease which tends to shorten life, and not exceeding a certain age. 
ie In most offices particular diseases are specified, and a warranty is also 
” given that the person whose life is proposed is not of intemperate habits. 
To enable the directors to judge of the eligibility of the risk, the party is 
| required to appear and to produce certificates of health; where the 
appearances cannot be obtained, if the certificates are considered satis- 
factory the assurance is granted on payment of a fine, in addition to the 
first annual premium.