Comparative Bonuses under Whole Life and Endowment Assurances

Abstract

It is now some years since a paper was presented to the Institute dealing with the comparative bonus-earning powers of whole life and endowment assurances. In view of the importance of the subject I have ventured to submit this paper, which I hope may lead to a useful and interesting discussion. The matter has been so ably dealt with by the late Mr. Sunderland, Mr. Lidstone and Mr. Chatham that I have the greatest hesitation in presenting my own views, and I must therefore beg the Members of the Institute to receive this paper in the same kindly spirit which they have always manifested towards new contributors.My object in the paper has been to show the relative bonuses which should be allotted to whole life and endowment assurance policies having special regard to(1) The expenses of the office;(2) Variations in the rate of interest earned; and(3) Mortality.In Table A are given the office premiums which have been employed in this investigation. They are based on the H[M] 4 per-cent Table, with a loading for a £1 per-cent compound reversionary bonus, together with 10 per-cent and a constant of 3s. per-cent for expenses and commission—