INSURANCE. 277. Insurance is security guaranteed by one party to another, for a stipulated sum, against damage or risk. It is of two kinds: insurance on property and life insurance. Property insurance includes Fire Insurance, Marine Insurance, and Live Stock Insurance. Fire Insurance is indemnity for loss of property by fire. Marine and Inland Insurance are indemnity for the loss of a vessel, or cargo, by casualties of navigation on the ocean or on inland waters. Stock Insurance is indemnity for the loss of cattle, horses, etc. 278. The Insurer or Underwriter is the party taking the risk. 279. The Insured or Assured is the party protected by the insurance. 280. The Policy is the written contract between the parties. 281. The Premium is the sum paid by the insured to the insurer, and in insuring property is estimated at a certain rate per cent of the amount insured, which rate varies according to the degree of hazard, or class of risk. 1. As a security against fraud, most insurance companies take risks at not more than two thirds the full value of the property insured. 2. Insurance business is generally conducted by Joint Stock Companies or Mutual Companies. 3. A Stock Insurance Company is one in which the capital is owned by individuals called stockholders. They alone share the profits, and are liable for the losses. 4. A Mutual Insurance Company is one in which each person insured is en. titled to a share in the profits of the concern, and is liable for the losses. The annual dividends returned by such companies (in case of profits) reduces the premium or cost of insurance; and the assessments made (in case of loss) increase the cost to the policy holder. EXAMPLES. 282. To find the premium or cost of insurance when the rate of insurance and the amount insured are given. 1. What must I pay annually for insuring my house. to the amount of $3250, at 11 per cent premium? 2. A man insured his life for $10,000, the rate being $21.40 per 1000. The dividend reduces the cost of the premium an average of 30%. How much is the average annual cost of his insurance ? OPERATION. $21.40 x 10 = $214, premium. 30% of $214= $64.20, dividend. $214-$64.20 $149.80, annual cost of insurance, Ans. = SOLUTION. If $1000 worth of insurance costs $21.40, $10,000 worth will cost 10 times $21.40, which is $214, the premium. Since the dividend reduces this premium 30%, the cost of insurance will be 30% less than $214, which is $149.80. RULE.-I. Multiply the amount insured by the rate per cent, and the product will be the premium. Or, II. To find the net cost of insurance, deduct the annuai divident from the premium. 3. What is the premium on a policy for $750, at 4%? Ans. $30. 4. What premium must be paid for $4572.80 insurance, at 21% ? Ans. $114.32. 5. A house and furniture, valued at $5700, are insured at 13%. What is the premium? Ans. $99.75. 6. A vessel and cargo, valued at $28400, are insured at 31%. What is the premium? Ans. $994. 7. A woolen factory and contents, valued at $55800, are insured at 24%. If destroyed by fire, what would be the actual loss of the company? Ans. $54237.60. 8. What must be paid to insure a steamboat and cargo from Pittsburg to New Orleans, valued at $47500, at & of 1% ? Ans. $356.25. 9. Mr. Bowtell has a house, insured for $8000, and the furniture for $4000, at 23%. What premium must he pay? Ans. $285. 10. A cargo of 4000 bushels of wheat, worth $1.20 a bushel, is insured at 4 of 11% on of its value. If the cargo is lost, how much will the owner of the wheat lose? Ans. $1636. 11. What will be the cost of insuring a quantity of wheat valued at $7500 at %? 12. What will it cost to insure a factory valued at $21000, at %, and the machinery valued at $15400, at $% ? Ans. $264.25. 13. A man insured his life for $25000, the rate being $25 per 1000. The dividend reduced the cost of the premium an average of 10 %. How much is the average annual cost of his insurance ? Ans. $562.50. 14. If the man died 12 years after he was insured, how much would the amount received by his family exceed the total cost of insurance, no account being taken of interest? Ans. $18250. 15. If he died 4 years after he was insured, how much would the amount received by his family exceed the total cost of insurance, the interest on the money amounting to $337.50? Ans. $22412.50 TAXES. 283. A Tax is a sum of money assessed on the person or property of an individual, for public purposes. 284. When a tax is assessed on property, it is a fixed sum apportioned at a certain per cent on the estimated value. When assessed on the person, it is apportioned equally among the male citizens liable to assessment, and is called a poll tax. Each person so assessed is called a poll. Non-resident tax-payers are not subject to a poll tax. 285. Property is of two kinds, real estate and personal property. 286. Real Estate consists of immovable property, such as lands, houses, etc. 287. Personal Property consists of movable property, such as money, notes, furniture, cattle, tools, etc. 288. An Assessment Roll is a list or schedule containing the names of all persons liable to taxation in the district or company to be assessed, and the valuation of each person's taxable property. 289. Assessors are the officers appointed to determine the taxable value of property, prepare the assessment rolls, and apportion the taxes. If the assessment includes a poll tax, then a complete list of taxable polls must also be made out. EXAMPLES. 1. A tax of $3165 is to be assessed on a certain town; the valuation of the taxable property, as shown by the assessment roll, is $600000, and there are 220 polls to be assessed 75 cents each; what will be the tax on a dollar, and how much will be A's tax, whose property is valued at $3750, and who pays for 3 polls? OPERATION. $.75 × 220 = $165, amount assessed on the polls. $3165 $165 = $3000, amount to be assessed on the property. $3000 $600000 = .005, tax on $1. $3750 x .005 $18.75, A's tax on property. = $.75 x 3 $2.25, A's tax on 3 polls. = $18.75+ $2.25 = $21, amount of A's tax. RULE. -I. Find the amount of poll tax, if any, and subtract this sum from the whole amount of tax to be assessed. II. Divide the sum to be raised on property by the whole amount of taxable property, and the quotient will be the per cent, or the tax on $1. III. Multiply each man's taxable property by the per cent, or the tax on $1, and to the product add his poll tax, if any; the result will be the whole amount of his tax. Having found the tax on $1, or the per cent, which in the preceding example we find to be 5 mills, or per cent, the operation of assessing taxes may be greatly facilitated by finding the tax on $2, $3, etc., to $10, and then on $20, $30, etc., to $100, and arranging the numbers as in the following table: |