Some Observations Concerning the Principles which Should Govern the Regulation of Life Insurance Companies

Extract

To the individual physical life there is no end more certain than death, and in turn nothing more uncertain than when that end may be reached. In a group of lives sufficiently large for the fair operation of the laws of average, it will be found, however, that, while no intelligent or safe prediction may be made concerning the length of any individual life, it can readily be told how many of the group will die each year. In other words, it will be found that there is a law of mortality, whose operations are so exact that, while they are subject to slight fluctuation from year to year, it is possible to predict in advance with practical certainty what will be the average lifetime of the group and the rate at which the lives will fail.

As with the advance of civilization the life of the individual became more complex, and his responsibility to those around him more marked, with an increasing necessity of adequately equipping dependents if they were to conquer in the struggles of life, men, subject to the same hazards and facing all an ultimate event, the only uncertainty affecting which was the moment of its occurrence, combined together for mutual protection, that from a fund created by the contributions of the many provision might be made for those dependent upon the few lives (their individual identity not known) which experience indicated might be expected to fail year by year.