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Preface

This is a basic text on life insurance. It presupposes no prior knowledge of the subject, and it covers all the topics that constitute the foundation for the study of more specialized aspects of life insurance. Although emphasis isplaced on the primary principles, the underlying reasons for contract provisions, actuarial computations, underwriting practices, and legal doctrines are also stressed. Technical terms are carefully defined and employed, and visual demonstrations of complex concepts are interspersed throughout the more technical sections of the book.

This book is a major revision of Life Insurance by Dan M. McGill, PhD, CLU. It was first published in 1959 with a revised edition published in 1967. The copyright was originally held by Richard D. Irwin, Inc., Homewood, Illinois, but was subsequently transferred to Dr. McGill, who graciously donated the copyright to The American College so his book could be revised for use in the CLU/ChFC curriculum.

Special thanks are in order to Samuel H. Weese, PhD, CLU, CPCU, President and CEO of The American College, and Gary K. Stone, PhD, CLU, Vice President of Academics at The American College, for their tireless efforts in bringing this project to fruition. Both Dr. Weese and Dr. Stone were instrumental in convincing Dr. McGill that his classic text should be the foundation upon which all CLU/ChFC students build. Without their leadership, this revision would never have been started, much less completed.

This revision is the collective effort of experts from insurance companies, colleges and universities, professional insurance associations and societies, actuarial societies, and insurance marketing agencies. This second edition of McGill's Life Insurance contains 15 completely new chapters that are not based on the original McGill text. Burton T. Beam, Jr., CLU, CPCU, wrote chapters 8, "Long-Term Care Insurance," and 33, "Group Life Insurance." Archer Edgar, Ram Gopalan, Michael Petersen, and Walter Zultowski, all from the Life Insurance Marketing Research Association (LIMRA), wrote chapter 29, "Life Insurance Marketing." Harry Garber, FSA, wrote chapters 30 and 31, "Financial Statements and Ratings." Jon Hanson, JD, authored chapters 26 and 27, titled "The Regulation of Life Insurance," and chapter 28, "Types of Life Insurance Carriers." Joseph Huver, CLU, ChFC, MSFS, wrote the material on structured settlements in chapter 6 on annuities. James F. Ivers III, JD, LLM, ChFC, wrote the material on income taxation of life insurance in chapter 11. Donald Jones, FSA, and Norma Nielson, PhD, wrote chapter 20, "Surplus—An Insurance Company’s Capital." Ronald F. Duska, PhD, wrote the material on the ethical issues of classifying risk in chapter 22. Ted Kurlowicz, JD, LLM, CLU, ChFC, authored the estate tax material in chapter 11 and the business uses of life insurance portion of chapter 12. John McFadden, JD, wrote the qualified plan material in chapter 12. Francis Schott, PhD, wrote chapter 32, "Life Insurance Company Investments." The author of the appendix ("How Much Life Insurance Is Enough?") is Thomas J. Wolff, CLU, ChFC.

Chapter revisions required extensive research and significant rewriting in many cases. All the authors revising chapters contributed significantly to this book and should be recognized for their accomplishments. Donald Jones and Norma Nielson, the authors of chapter 20, revised the chapters dealing with life insurance mathematics, reserves, asset shares, and nonforfeiture values (13-15 and 17-19). James Winberg, CLU, ChFC, FLMI, FALU, worked with Jeremy Holmes on behalf of the Home Office Life Underwriters Association to revise the chapters on home office underwriting and on reinsurance (21-24).

The manuscript benefited from the constructive criticism and helpful suggestions of many reviewers. Special acknowledgment is appropriate for the assistance of Larry Brown, LLB; Dr. Robert M. Crowe, PhD, CLU, ChFC, CFP; Dr. Gary Stone PhD, CLU; and C. Bruce Worsham, JD, LLM, CLU, each of whom read several chapters, except Dr. Stone, who read the entire manuscript. Helpful suggestions were provided by my colleagues on the faculty at The American College, especially Stephan R. Leimberg, JD, CLU, and William J. Ruckstuhl, CLU, ChFC, as well as by Robert J. Doyle, Jr., CLU, ChFC, a former colleague.

I want to express thanks and appreciation to those employees at The American College who have made this book a reality through extraordinary effort and tolerance for frustration. Although many will remain unnamed, special mention is necessary for Wendy Cox, Keith de Pinho, Elizabeth Fahrig, Renée Heron, Sally Kennedy, Barbara Keyser, Maria Marlowe, Rosemary Pagano, Suzanne Rettew, and Emily Sims of Editorial Services; Jane Dawson, Judith Hill, Deborah Ann Jenkins, and Monica Peta of the Vane B. Lucas Memorial Library; Patricia G. Berenson, Susan Doherty, Jane Hassinger, Christina Liberace, and Evelyn Rice of Production Services; and Jill Schoeniger, Manager of Publications. Special thanks go to Margaret Terrell-Reeves for her diligent and conscientious typing and tracking of numerous drafts of the manuscript. Finally, I extend my gratitude to Lynn Hayes, the managing editor, whose outstanding editing skills and unwavering commitment to excellence have made an unmistakable imprint on this book.

Many individuals have supplied information and other support that permitted this manuscript to culminate in the second edition of McGill's Life Insurance. Especially noteworthy are John Angle, FSA; Ben Baldwin, CLU, ChFC; Joseph Belth, PhD, CLU, CPCU; Kenneth Black, Jr., PhD, CLU; Richard Breen, JD, LLM, CLU, ChFC; William Broundie, CLU, ChFC; Patrick Collins, CLU; James Douds, JD; Joseph Higgins, FSA; Walter Miller, FSA; Alan Press, CLU; James Reiskytl, FSA; George Rejda, PhD, CLU; Gordon K. Rose, CLU; Harold D. Skipper, Jr., PhD, CLU; Fred Stitt, CLU; Edward Stoeber, JD, CLU; and Richard Weber, CLU.

Without the pioneering work of Dr. Solomon Stephen Huebner, none of this would have been possible.

Every attempt has been made to ensure that this volume is accurate and up- to-date. Since I have full confidence in Murphy’s law and expect you will find some errors or shortcomings, I would appreciate your critical reactions and suggestions for improvement. With your help we can make future editions of this classic text even better.

 

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