Differences in Rates of Mortality

War is a major catastrophe for which life insurance companies must make provision. During the anniversary year of the company, Americans and Canadians were deeply engaged in a Second World War. The contingency of war entails such possibilities of loss as to require the maintenance of special reserves, as well as restrictions in policy contracts for new applicants because many are likely to enter military service.

At that point in history, after such a long record of peace, American life insurance companies generally paid little attention to war risks prior to the First World War, and, in fact, most restrictions in policy contracts written during that war were subsequently removed. Starting in 1941, however (in Canada since 1939), restrictions on account of war service were put into effect in all new policies. But, except on the newly issued policies, the company was obliged to pay claims for deaths arising out of military service during both major wars.

Fortunately, the duration of active participation in the First World War was relatively short, and the company paid out, in all departments, $8,252,000 on account of deaths due to that war. In the second war the company paid out, up to the end of 1942, $3,500,000 on deaths among military personnel and among civilians killed by enemy action. The general mortality picture for Canadian policyholders differed somewhat from that in the United States.

More than 1,600,000 Canadians were insured in the industrial department of the company. Generally speaking, Canadian mortality was a little higher at the earlier ages, but this was offset by a balance in favor of the Canadians in later life. According to the data available at the time, the average length of life of the Canadian policyholders was just about the same as that of the American policyholders for the company as a whole.

After such a long record of peace, American life insurance companies generally paid little attention to war risks prior to the First World War, and, in fact, most restrictions in policy contracts written during that war were subsequently removed.