On the Mortality observed amongst the various Classes of Bonus Policies in the British Empire Mutual Assurance Company

Extract

The object of the present paper is simply to bring to the notice of the members of the Institute the results of an investigation into the mortality prevailing amongst the different classes of bonus policyholders in the above-named Company, and to point out what appears to be the practical bearing of these results. There are also one or two points in connection with the collecting of the experience which may be worth mentioning.

In the company in question (in common, I believe, with many societies) an option is given to the policyholders, on the occasion of the first division of profits in which they are to participate, of receiving the value of their bonus in one of three ways:—

I. Cash.

II. Reversionary Additions.

III. Reduction of future Premiums (either for life or for three years).

The selection has usually been understood to be made once for all, but, as a matter of fact, the option has been occasionally allowed at subsequent distributions.

There appeared to be some reason for anticipating a difference in the relative mortality of these three classes of policyholders in consequence of the exercise of this option. This seemed at least a point worth testing by an appeal to actual experience; and it was mainly with the view of instituting such a test that the investigation referred to was commenced.