Insurance

(-shooranz.) [From L. ad, and securus, security. ] (Law and Com.) The act of providing against a po ible lo , by entering into a contract with one who is willing to give a urance; that is, to bind himself to make good such po ible lo , should it occur. The instrument by which the contract is made is denominated a policy, and the stipulated consideration is called the premium. In this country, Fire and Marine I. are almost invariably effected by joint-stock companies, whose modes of operation are too well known to call for expatiation here.-Life I. (to which the word A urance is now more generally applied) is a contract by which a party, for a certain premium, agrees to pay a certain sum, should a person, to whose life it relates, die within a time specified; or to pay the executors of the insured a certain sum at the time of his death. Such policies, however, usually make an excepption in the case of death by suicide. By this means, a family maybe furnished with means of support in caso of the death of its head. According to general practice, a life insurance is seldom made by the payment of a single sum at the time it is effected, but almost always by the payment of an annual premium during its continuance. An individual, therefore, who has insured a sum on his own life, would forfeit all the advantages of the insurance were he not to continue regularly to make his periodical payments. Life I. are conducted by several kinds of societies; as the proprietary, mutual I., and mi zed societies. The proprietary, or joint-stock companies, are formed of persons who have subscribed a capital, on the I. of which the busine of the company is carried on, and who divide the profits entirely among themselves. In the mutual I. societies, on the other hand, there is no proprietary, the a ured being likewise the a ure rs, and dividing the profits among themselves, after deducting the expenses of management, and reserving a guaranty fund. In the mixed cla of offices, which is the most numerous in the U. States, there is a proprietary, but, at the same time, the a ured are allowed to participate largely in the profits of the society, which are usually divided in the form of bonuses at stated periods. The premiums to be paid are adjusted according to the age of the party on whose life the I. is made; being lowest on young lives, and increasing from year to year as the expectancy of life diminishes. [s. 487]