SURRENDER PRIVILEGES. The first Massachu setts non-forfeiture law directed that the reserve of a lapsed policy-holder should be used to pur chase a paid-un policy of the same kind as the policy which had lapsed. and for such an amount of insurance as SO per cent. of the reserve would pay for as a single advance premium. Two other modes of settlement have sinee been introduced, extended insurance and cash payments. Under the former method the reserve is used to continue the original policy in force as long as it suffices to pay the premiums. and in many companies the insured are allowed to reinstate their policies by making good the unpaid hack premiums with in terest at any time before the reserve has been ex hausted. Under the second method the insured is allowed to withdraw a certain percentage of I. is reserve in cash.
In the competition for new business the com panies have found it to their advantage to go further than the law requires, and to return to the insured a part of the surplus in the form of dividends. These may be declared annually, m
at stated periods, or at the termination of the policy. \\ hen the dividend is paid annually it may be used either to reduce premiums or to pur chase additional insurance. When it is paid only at the termination of the policy it amounts to an addition to the indemnity. In the ease of term insurance, however, the plan frequently em ployed is to pay no latrt of the surplus to those who lapse or who die before the end of the period, and to use the surplus of the policies thus prematurely terminated to increase the divi dends of those who survive to the end of the term. Such insurance is known as semi-tontine insurance.