ured pays its full actuarial cost for each additional
feature of the policy that he buys. The various policies issued by a
company are approximately equivalent actuarially, on the basis of the
assumptions made, but they are of very different degrees of desirability,
in view of the circumstances of the insuring individual. The choice of
policies deserves a more careful investigation than it usually received.
Moreover, carelessness and ignorance in the choice of a company is
responsible for widespread loss and suffering.

Policies differ in respect to the mode of payment. The payment usually
takes the form of a lump sum payment at death or at the maturity
of the endowment. In recent times there has been a growing use of
optional forms of payment which give to the beneficiary annual or
monthly installments for a definite number of years or for life.

Sec. 14. #Insurance assets and investments as savings.# The discussion of
savings institutions in the last chapter left unmentioned insurance,
which probably is destined to be the most important of all. The assets
of life insurance companies in the United States have already attained
the enormous sum of $5,000,000,000, a sum equal to the reported
savings bank deposits. In the last twenty years life insurance assets
have more than doubled in each decade, and are now increasing by about
a quarter of a billion dollars every year.[7] These great funds,
which in equity nearly all belong to the policyholders, form already
approximately one thirtieth of all the private capital of the country.
They are invested in many ways, in real estate, in loans secured
by mortgages on real estate, in bonds--municipal, railroad, and
industrial. The problem of wise legislation for these organizations,
of their competent and honest management, and of their relation to the
social, business, and political life of the nation, is certain to be
of ever-increasing importance. We are hardly more than emerging from
the experimental stage of life insurance, hardly more than at the
beginning of its development.

The premium in personal insurance (life, accident, sickness,
invalidity, old age pensions) is in almost all cases paid out of some
current income. The premium paid is just so much subtracted from the
amount available for present direct use and applied to the purchase of
future incomes for one's self or family. The insurance method differs
from the method of depositing savings by its contingent natur