Class Notes (837,000)
Canada (509,985)
MTHEL 131 (111)
David Kohler (106)
Lecture

Lecture 1: History and Fundamentals of Life Insurance

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Department
Mathematics Electives
Course
MTHEL 131
Professor
David Kohler
Semester
Winter

Description
History of Insurance 1757, London, England Insure (each other by agreement) income of fathers and husbands against premature death to protect families against poverty. *denied at first, passed in 1762, Old Equitable was founded 3 prime financial concerns of Canadians 1. Dying too soon 2. Living too long 3. Becoming disabled *Life and health insurance provides products to deal with this 1583, London, Richard Martin - Country club regular, self-made - William Gibbins (general manager) is his biggest asset - wager of 383 pounds, term: 12 mths, premium: 8% of 383 - Gibbins died near the end - men argued w/ lunar months - court ruled Martin wins Delay of the beginning of life insurance 1. Lack of mortality table or similar data 2. Plague (stabilized in 1700s) 3. Wager/gamble (religious) vs. insurance Basic Life Insurance Principles 1. Whole of Life 2. Level Annual Premium 3. Age of Entry (younger = cheaper) *biggest asset: trust/credibility *life insured must be healthy (insurable interest = policy holder must care for the healthy life insured) In event of public calamity Reserve the right to pay in full, then insurer can: 1. pay by multiple payments (Old Equitable’s solution) 2. raise premium (Old Equitable’s solution) 3. re-insurer 4. fine print where the calamity is not covered 5. plague protection as plus to normal policy etc. *proven unnecessary when they have 4M face value and 1M reserve Inflation can lead to beneficiaries being under-insured (but hardly the company due to inves
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