In the first place, _there should be no policy in the company that
does not contribute its proportionate share of the expense allowance
during every year of its life_. I make a special point of this, for at
present the policies which have become paid up, either by the payment
of a single premium at the outset or by the completion of a stipulated
number of payments, contribute practically nothing to the expense
account after the premium payments cease.
The following plan, I think, complies with all the requirements of the
problem. By the proposed method every policy, at all stages of its
existence, contributes its exact share to the expense fund, whatever
its plan of payment may be.
Let us, as an illustration, examine the case of a ten year endowment
policy, taken out at age 30, and consider it under three aspects,
first, as paid for in advance by a single payment, second, as paid by
five annual payments, and third, as paid for annually throughout the
term. I have used this short term endowment policy simply for
convenience, the rule applying equally to policies of longer term or
to the ordinary life policy, which is, in fact, an endowment policy
payable at death or age 100.
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