A comparison is next made between the rates of mort. on healthy lives and diseased lives, and on the amalgamated results of the healthy and diseased, of which the result is as follows:

The foregoing comparison points out that while the rate of mort. of diseased assu. lives is at ages under 60 about 20 p.c. greater than healthy assu. lives, the rate of mort. on all lives-healthy and diseased-is only greater by about p.c.; thereby indicating the smallness of the add. to the prem. required to be paid by the whole of the lives which would cover the increased risk in respect to diseased lives. The difference between the rates of mort. on healthy and on diseased lives is very much less than the difference between the rates on assu. "with" and "without" profits, which shows that the constitutional infirmities detected by the medical officer are not so unfavourable as the grounds of the secret motives which determined the assured to select assu. at the cheapest non-par. rates of prem. An examination of the grounds of the "extra charge" for defective health showed that several sections of the imperfect lives might be formed, "according to the nature of the deteriorating element for which such charge was made." Some, however, could not be so classed. Four sections were formed-those charged extra for: (1) unfavourable personal hist., including gout and hernia; (2) unfavourable family hist.; (3) gout; (4) hernia. The rates of mort. (summed in quinquennial groups) in these classes separately and in total are given in tabular form-the following being the general result:

1. That the mort. on lives charged extra for defective personal health greatly exceeds that on the lives charged extra for unfavourable family hist. 2. That the mort, on lives charged extra for gout is greatly in excess of that for any other infirmity. 3. That the mort. for lives charged extra for hernia is lighter than on healthy lives.

From the above materials, as to personal hist. and gout, Mr. Meikle has prepared adjusted T. of mort. From these again T. of annu. of 1 during life, and of the ann. prem. for assu. of £100 at death, were prepared at 3 p. c. int.: a comparison of which with the rates required for healthy lives shows the add. prem. for "unfavourable personal hist." and for gout. We can only find space for the following T.

I. TABLE SHOWING THE ADJUSTED LAW of Mort. of DISEASED LIVES.

II. TABLE SHOWING THE ANN. PREM. FOR INS. £100 AT DEATH ON DISEASED LIVES (3 P.C.) AT QUINQUENNIAL PERIODS.

In dealing with the results given in the Scottish Rep. and in Mr. Meikle's paper, it must always be remembered that in the data upon which those results are based there were included no returns from any ins. asso. making the ins. of diseased lives a special feature. The contributing offices were Scottish Widows', N. British and Mercantile, Edinburgh L., S. Union, Standard, S. Equitable, S. Provident, City of Glasgow, Life Asso. of Scotland, S. National,-10 in all, or just one-half in number of the entire cos. who contributed their experience.

Mr. Meikle in another part of his obs. remarks that a classification of the causes of death of "diseased lives" points out the interesting medical fact that of those charged extra for gout, only 32 p. 1000 died from tubercular diseases; while 123 p. 1000 died from diseases of uncertain seat; 264 p. 1000 died from diseases of the brain; 129 p. 1000 died from diseases of the heart: and of those charged extra for unfavourable personal and family hist, only 48 and 55 p. 1000 died from diseases of uncertain seat; while 156 and 218 p. 1000 died from tubercular diseases; 169 and 182 p. 1000 died from D. of the brain; 90 and 73 p. 1000 died from D. of the heart, etc.; 163 and 145 p. 1000 died from D. of the lungs; 128 and 218 p. 1000 died from diseases of the stomach and liver.

In 1871 the mort. experience of the Gresham L. was again pub. by its medical adviser, Mr. A. H. Smee, extending over its second 1000 deaths. This time we have no specific T. for the diseased life class, but there are several T. of considerable interest regarding the general mort. of the Co. These will be given under GRESHAM LIFE, MORT. EXPERIENCE of.

In 1872 Mr. James R. Macfadyen read before the Inst. of Act. a paper, "On Extra Premium," in which he considered many points arising out of the practice of ins. diseased lives. [Assu. Mag. xvii. p. 77.]

In the same year Mr. Makeham contributed to the same vol. of the Mag. a paper, On the Means of dispensing with Extra Prems. for Deteriorated Health. From this paper we take the following passages:

The recently pub. experience of assu. offices shows beyond dispute that lives which have been taken at an extra prem. are, upon the whole, materially worse than those taken at the ordinary ratesalthough, perhaps, not to the extent which might have been supposed. Comparing the average duration of life among the healthy and deteriorated lives respectively, I find that, roughly speaking, the results may be thus stated:

At the ages 15 to 25 the difference corresponds to an add. of 6 years to the age.

55" 65 65, 75

I

while from and after the age of 80 the two T. about coincide-indeed in some instances the deteriorated lives have rather the advantage-an anomaly due prob. to the paucity of the lives under obs. at those advanced ages.

It is to be regretted that the average amount of extra prem. charged in the cases from which these results were deduced has not been ascertained. Nevertheless, I think it is evident that, while the existence of a higher mort. is indisputable, it is covered-and prob. considerably more than coveredby the extra charges usually made. The conclusion, therefore, to be drawn from the experience in question, seems to be that, while perhaps the imposition of extra prems. may be somewhat more sparingly resorted to than formerly, still it would be highly injudicious to dispense with them in cases where the existence of decidedly unfavourable circumstances is evident. For although, if a fair general average were obtained, the tabular rates would be fully adequate to cover the normal proportion of such lives, yet an office known to adopt a practice of this kind would doubtless be resorted 23

VOL. II.

to by an inferior class of lives, in numbers sufficient to disturb the average, and thus its aggregate mort. might by this means be affected to a serious extent.

The editors of the Assu. Mag. say in a note:

The above paper will no doubt prove practically useful to the man. of the cos. which adopt the method of charging for impaired health therein discussed; but it appears to us to be even more valuable to the student of the theory of life contin., as suggesting the course which future investigations into the mort. among under-average lives should follow. Mr. Makeham's investigations clearly demonstrate that the point to be ascertained is whether the increased mort. among such lives is more apparent immediately after the grant of the pol, or in later years; and any future investigation into such mort. must be considered incomplete that does not give special attention to this point. We shall review this branch of the subject in some detail under EXTRA PREMS. The Deutsche Versicherungs Zeitung, 1872, contained an able art. on the ins. of diseased lives, from which the following passages are taken :

Whenever it happens, as is sometimes the case, that a life ins. co. finds itself in circumstances in which it considers itself justified in accepting an application for ins, from a person who has been rejected by other cos., the co. usually falls into bad repute with the other cos. It gets the reputation of being ready to accept any application that is made. This reproach is far from being always welldeserved. What may seem, at first sight, to be evidence of a readiness to accept any applications that are presented without proper and reasonable precaution, may, in reality, be only the result of a more careful examination and more exact diagnosis. There are a great many questions relating to life ins. which still remain unsettled. One of them is, what is the proper mode of applying the principles that control the examination of applicants? The doubts and uncertainties which hang over this subject have often given rise to serious differences of opinion between the directors of cos. and their general agents. Where doctors disagree, who shall decide?

Life ins. cos. are too rigid and narrow in their conservatism. There is no reason why they should not use judgment and discretion in reference to the circumstances of each particular case, and adjust the prems. charged in accordance with such circumstances. This is what is done by fire ins. cos. Fire ins. cos. modify their terms, make them more or less strict according to the nature of the risk. In life ins. also, the liability incurred by a co. in assuming various risks, which are widely different in their nature, cannot in the nature of things be correctly estimated by any fixed and inflexible rule. The function of ins., considered in its broadest sense, is to provide an indemnity upon the destruction of anything in existence, whenever its destruction involves à pecuniary loss. If the ins. actually provided by the existing cos. at the present day is less all-embracing in its scope, the cos. should at least aim at rendering it as much like the theoretical conception as is practicable. [DISEASED LIVES, Ins. OF; PRACTICE.] [MEDICAL SELECTION.]

The directors of the Barbadoes Mut. Life, in their rep. presented to the proprietors in February, 1873, say:

The large number of applications which the directors of the so. are compelled from time to time to decline, and often on apparently trivial grounds, suggest to the board the propriety of entering on an inquiry respecting the after-duration of all the lives which have been refused since the formation of the so.-with a view, should the investigation prove favourable to such a step, of introducing a system by which questionable lives may be accepted on a period of probation. The Act. is now prosecuting the inquiry, and the board have simply referred to the subject on this occasion because they are retiring from office, and desire to hand it over to their successors for completion.

We shall be glad to learn the result of this investigation.

We believe that at present the practice of ins. diseased lives has not yet been introduced into the U.S. It has been contemplated, and there would seem to be scope for such an office; but it would require very strict management. It appears to be a rule there to peremptorily decline all cases of consumptive taint. Dr. Allen, in his Medical Examinations for Life Ins., 5th ed., 1869, says: "The rule is absolute that consumptive cases should be rejected. Physical investigation is always to be exact, for the healthiest external appearance may but hide the germs of disease."

In 1873 an official document of great interest was pub. in the U.S. It was the medical rep. of the Provost Marshal General, and contained the results of the medical inspection of 605,000 men during the war. Fifty different nationalities are represented, and the average ratio of unfitness is 257 per 1000. The negro stands first in point of health, and after him the Canadians and Scandinavians. The Germans and Irish come last. The Germans, though with the largest chest-measure, proved among the most unhealthy. More disqualified persons were suffering from disorders of the digestive organs than from any other. Outdoor people were healthier than indoor. 52 p.c. of professional men were unfit for duty, and only 35 p.c. of unskilled labourers. But the average record shows more favourably than either England or Germany. This last dictum we take upon the authority of the rep. itself.

In view of the growing practical importance attached to the Ins. of Diseased Lives, we furnish a series of articles upon the subject of Disease, which would otherwise have been regarded as beyond our scope. [EAGLE L.] [HEALTH INS.] [MORT., LAW OF.] [SICKNESS.] DISEASED LIVES, INS. OF; POINTS IN PRACTICE.-In reference to the practice of ins. impaired and diseased lives, we may offer the following brief obs. We consider this branch of bus. should never be undertaken by a mutual office. It is at once too risky and too uncertain. A mixed office may undertake it, reserving, say, half the prospective profits to the shareholders, as a compensation for the great risk of loss; for it is at best only an even chance whether an office commencing the ins. of such risks will make profit, or loss, in its earlier years. It will take some 10 years to ascertain the fact; and it will then be too late to alter the contracts already accepted.

The asso. must bring to bear upon the selection of lives, and assessing the proper rate of prem., the highest medical skill it can command; either by securing the advice of several medical officers of large experience: or, better, by the aid of a board composed in part of medical practitioners. [MEDICAL SELECTION.]

The proposal form should be specially devised with regard to the nature of the bus. proposed to be undertaken. The policy should be most strict in its conditions; securing the absolute right of forfeiture in the event of any intentional concealment being discovered. A copy of the proposal should in all cases be attached to and made part and parcel of the pol. [PROPOSAL FORMS.]

In the periodical valuations for profits, a principle must be settled. Either the lives must all be taken at their increased ages-that is their real age, plus the office add.; or the whole of the special loading on existing lives must be reserved. [EXTRA PREMS.] [SURPLUS.]

In the case of surrender of policies, the value given must be founded on the actual experience of the office so far as that can be ascertained. [SURRender Values.]

The 6th schedule (last question) of L. Assu. Cos. Act, 1870, requires "statement of the manner in which pol. on unhealthy lives are dealt with." This affords the means of throwing some light upon the practice of offices in this important particular. Taking the returns for 1871 and 1872, we have the following results:

Albion.-"Diseased lives were taken at equivalent increased ages."
Atlas.-"No unhealthy lives taken."

British Provident.—“Pol. on unhealthy lives are treated as though the assumed ages were the real ages.

Caledonian." Pol. on lives for which an extra prem. is charged on account of health are valued at the actual age, throwing off the whole of the addition to the net prem., the ann. extra prem. being held to cover the add. risk.”

City of Glasgow.-"Assu. on the lives of persons of less than average health, and of persons exposed to climate or occupation risks, were valued at the actual ages of the assured, the extra prem. payable each year being considered sufficient to cover any increase such risks might occasion in the mort. thereof."

Clergy Mut.-"In the case of pol. upon lives taken out at increased prems., the difference between the prems. charged and the ordinary prem. is not included in valuation of prems. receivable,"

Clerical, Medical.-"For purposes of reserve and distribution of bonus, pol. granted on unhealthy lives are treated as though the assumed ages on which the increased prems. are based were the real ages; but for purposes of surrender they are treated as though granted at ordin. rates."

Colonial." In the case of pol. on unhealthy lives, the add. prems. charged are regarded as a source of income, out of which the extra claims arising from the increased mort. of this class are to be paid."

Crown." Pol. on lives below the average, accepted at prems. for an increased age, are treated as if the increased age were the real age of the assured."

Eagle.-"Pol. on unhealthy lives are dealt with for all purposes as if the advanced ages at which the lives have been accepted were the true ages.'"

Edinburgh.-"Pol. on unhealthy lives have been valued at the investigation at the advanced ages corresponding to the rates of prem. charged."

English and Scottish Law.-Question not answered.

Equity and Law.-"On the grant of a pol. on the life of a person who is believed to have an expec. of life less than the average, the age is taken as increased by a certain number of years corresponding to the add. prem. charged. Then in all calculations as to the amount to be reserved for the pol. and the distribution of bonus, the life is always treated as if the assumed age at entry had been the real age. But in the case of the holder of a pol. wishing to surrender it, the presumption being that the life assured is in better health than at the date of the issue of the pol., the surrender value is calculated as if the prem. for the real age at entry had been charged."

Friends' Provident.-"The manner of dealing with pol. on lives estimated to be other than first-class is by charging 'extra prems.'

Guardian." In valuing pol. upon invalid lives, the advance ages are taken for which the prems. have been charged."

Hand-in-Hand.-"As regards pol. on unhealthy lives, both in the ann. valuations and for surrenders, the extra prems. are thrown off, and the lives treated as of average value at their real ages.

Imperial.-"Pol. on unhealthy lives are valued as at the advanced ages charged for." Law Life.-"The So. does not accept risks on lives considered actually unhealthy; but in somewhat doubtful cases an add. is made to the prem., adapted to the exigencies of the particular case.'

Law Property.-"The add. prems. for assu. on the lives of persons not of the first class in eligibility form part of the ordin. prem.-the lives being considered as so much older, or a per-centage add. to the tabular prem. is made."

Law Union.-"Lives taken at increased rates of prem. are treated (for valuation, but not for surrender) as being of the ages to which, according to the Co.'s pub. T., such increased rates of prem. correspond."

Legal and General."If a pol. is granted on an unhealthy or under-average life, the prem. is charged as though the true age were as much higher as is supposed to cor

respond to the deterioration. The office age is then substituted for the true age for all valuation and reserve purposes. For purposes of surrender, whether of pol. or bonus, the true age is adopted.'

Life Asso. of Scotland.-"Pol. on unhealthy or under-average lives, assured at higher prems. than the ordin. rates for their true ages, are dealt with in the valuations as of the higher ages corresponding to the prem. charged.' Lond. Assurance.-"In the case of pol. on unhealthy lives, the add. prems. charged are regarded as a source of income, out of which the extra claims arising ann. from the increased mort. of this class are defrayed. So that, referring to Schedule 5, answer to question 7, the 'net liability' is the same, but the difference between the office and the net prem. is greater in these pol. than in similar pol. on healthy lives."

Lond. Life." In the few cases in which a pol. has been issued on a life considered to be below the average, the prem. for an older age has been charged, and the valuation is made as for a pol. on a life of such increased age."

Lond. and Prov. Law.-" Lives assu. at increased rates were assumed to be, at entry, of the ages corresponding to the prems. charged."

Lond. and Southwark.-" Pol. are not granted upon lives in an advanced state of disease; but in all cases where lives are deteriorated to a moderate extent only, such an add. is made to the tabular prem. as is believed will compensate for such deterioration." Marine and General.-"When pol. are granted on unhealthy lives, they are dealt with by an add. to the age of the assured life."

Metropolitan.-"Pol. on unhealthy lives, accepted at prems. for an increased age, are treated both for valuation and surrender as if the increased age were the real age of the life assured."

Midland Counties.—Question not answered.

Mutual. "No lives are accepted which are deemed to be actually unhealthy; but in doubtful cases an increased prem. is charged, according to the exigencies of the case; and they are dealt with in the valuation as pol. issued at the higher prems., but at the true ages of the lives upon which the pol. are effected."

National Guardian.-"Unhealthy lives are not assured by the Co."

National Life.-"In every case where, on account of the life, at the time of the proposal, having been considered under the average as regards prospect of longevity, an assu. has been granted at a permanently increased prem., the pol. is classified and valued at an add. to the real age corresponding to such increased prem."

North British and M.-"Pol. on unhealthy lives, accepted at prem. corresponding to an increased age, are dealt with in all valuations, whether for surrender or ascertaining the Co.'s liability under them, as if the increased age were the real age." Northern. "In the case of pol. issued at increased prems. on the lives of persons supposed to have an expec. of life less than the average, the advanced ages for which the prems. have been charged are taken in all calculations, whether as to the amount to be reserved for the pol. or the value for surrender."

Norwich Union.-"As a rule, unhealthy lives are not insured in this office. In valuing the Amicable pol., where any extra prem. has been charged, the life has been treated as existing at an advanced age."

Pelican." Pol. on unhealthy lives are dealt with at their rated age, and not at their real age."

Planet."Lives assu. at increased rates were valued at the ages corresponding to the prems. charged, so that an increased reserve is made for every increased prem. Provincial.-"Unhealthy lives are not accepted, but lives considered rather below the average are sometimes taken at increased prems. In such cases the pol. are entered and valued according to the true ages of the lives, and at the prem. corresponding thereto."

Prudential.-"No increased prem. is charged on unhealthy lives; the add. risk is met by providing that a deduction shall be made from the sum assured in the event of death within a specified term of years. This deduction decreases yearly during the term, at the end of which it disappears entirely. In valuing these pol. the full sum assured is in all cases computed. A few old pol. are in existence, on which the prems, are increased. In these cases the value has been ascertained upon the 'rated up' principle." Rock.-"In cases in which an add. prem. has been charged for any deviation from the normal standard of health, in the valuation of pol. to ascertain the liability thereunder, as well as to determine the value thereof for surrender, no account is taken of such add., which is arbitrarily assessed: it being considered, as with extra prems., that the add. amount charged is the exact measure of the add. current risk incurred, and is entirely absorbed thereby."

Royal." Proposals for assu. on the lives of persons whose constitutions are, from any causes, regarded as much inferior to the average healthy standard, are not entertained. If only slightly impaired, they are usually accepted at rates applicable to some more advanced age at which the expec. of life is judged to correspond with that of the lives proposed. The assumed ages at entry are adopted as part of the basis for the calculations which may subsequently have to be made in connexion with such assu."