e occurrence insured against. Finally, the amount
of the indemnity must not be greater than the loss incurred. Some of
the greatest difficulties in insurance arise from the absence of these
essential conditions. When there is no insurable interest or when
the indemnity is greater than the loss that may be incurred, the
beneficiary may and sometimes does find it to his interest to bring
about the socially injurious event insured against. He artificially
increases the loss against which insurance was taken. When the insured
sets fire to his own buildings, he makes an illegitimate use of
insurance. Constant efforts are made by insurance companies to guard
against these "moral risks," the least calculable of any. Merchants
whose stocks have been mysteriously burned two or three times find
difficulty in getting further insurance. Formerly insurance was not
paid in case of death by suicide; but now usually no such limitation
is contained in a policy after a period of one or more years. As men
rarely plan suicide years in advance, death by one's own hand some
years after taking life insurance is regarded as coming under the
ordinary rules of chance. Yet it is to be feared that this
liberal policy serves as a temptation at times to crime and to
self-destruction.

Sec. 8. #Purpose of life insurance.# Property insurance is mainly an
aspect of enterpriser's cost, whereas personal insurance is more
closely connected with the object of saving.[3] We shall in the rest
of this chapter limit the discussion to the one most important form
of personal insurance, that called life insurance (sometimes called
survivors' insurance).

Life insurance is that form of insurance in which partial indemnity
is provided for survivors against the financial loss incurred by the
death of the insured. Usually the insured is the breadwinner of
the family and the beneficiary is a member of his family, but in an
increasing number of cases the beneficiary is the surviving business
partner, a creditor, or a business corporation with an insurable
interest in the life of one of its employees.

Life insurance has been much used by persons mainly dependent on labor
incomes[4] rather than on incomes from capital, by those receiving
salaries, professional fees, and by active business men. It has of
late been extended rapidly, as "industrial insurance" to wage earners,
in policies never exceeding $1000, but averaging very much less,
and often being for no more t