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American Valuation Tables

Published online by Cambridge University Press:  18 August 2016

William Anderson Hutcheson
William Anderson Hutcheson
Affiliation:
Mutual Life Insurance Company of New York
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Extract

All members of the Institute are more or less conversant with the “field” work of American Life Insurance Companies, but comparatively few have had the opportunity of becoming acquainted with the “inside” methods of these Institutions, which, as might be supposed, differ in many respects from the methods of British Companies. One of these differences is that Valuation Tables are much more extensively used there than in Britain, and it is not surprising, therefore, that various Valuation Tables have, from time to time, been published in America. No notice seems to have been taken of them in the Journal, so I propose, in the first place, to indicate briefly the contents of these publications, and then to refer to some of the American methods which necessitate the existence of these various Tables.

Type
Research Article
Information
Journal of the Institute of Actuaries , Volume 37 , Issue 1 , April 1902 , pp. 91 - 103
Copyright
Copyright © Institute and Faculty of Actuaries 1903

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References

page 91 note * In America, the reserve at the end of any policy-year is designated the terminal reserve; this terminal reserve, plus the net premium payable at the commencement of the following Policy-year is called the initial reserve; and the mean of the initial and terminal reserves of any policy-year is known as the mean reserve of that year. Thus, e.g., in the case of a life policy effected at the age x, n−1V x + π x , n V x , and ½ {( n−1V x + π x + n V x } are the initial, terminal, and mean reserves respectively of the nth year.

page 92 note * To quote from the Massachusetts Nonforfeiture Law of 1880, an “Insurance value is the present value of all the normal future yearly costs of insurance which by its terms a policy is exposed to pay in case of its continuance.” The “cost of insurance” is the British expected death strain—qx+n(1− n+1V x ) in the case of a “life” policy taken out n, years ago at age x— so that the “Insurance value”, being the present value of all the normal future yearly costs of insurance, would, w being the limiting age in the Table, in such a case, be