GOVERNMENT LIFE ASSURANCE.

Bruce Herald, Volume VI, Issue 36, 22 March 1871, Page 3

GOVERNMENT LIFE ASSURANCE.

lit notioing the lecture Tecently delß "ve'red iff« Milton by; 7 Captain on the Jaboye7 f imjyortari t 'subject;^ in '- pur, last issue] our refydere !a ; resumf. >of ihe lecjum .- 'V %:;.<■:. > ■■_.••. -i Captain Baldwin said that hi* subject an ? uninteresting one / at the Same. tim|ot" was ope of y^ry great importance. "The amount of money representedi. ljy '.the, business of life assurance' was something surprising. ■■ : Jfr- was calculated that I;he•peop'le of England and of the -Bfitish de-i :pendendigs .paid annually Jn. iprenfttims ;tfcej sum of eleven or twelve millions Sterling-, j -a1 thougfr ; the time "that had- elapsed sin ce; •fhe^firstt 'Jife assurance office- was started' '-was'iipt so Very .'far distant. The /oldest • officje was set agoing not much mpre^uan « hundred years ago. While human life the case of individuals was most un■certtiin,'it. was 'found that in; theaggTe; ;gate,it;was not so/ Provided thatTaUnrge numberof lives were obtained by an'insurance office,ttbe number of deaths yearly, -could he very Closely thus 'rendering life assurance a safe commercial speculation, 'provide^ sufficient business •were .'transacted. The firs t really practical; : tables of mortality, showing the probable •duration of -life at any given age, were the 1 Northampton tabtes, but those tables he said were defective, though the •tables, -prepared by Dr Heysham, and compiled by "Mr Milne of the -Sun Life Assurance Office, were nearly, as correct as it •wa9:possibie -to attain — near enough at all -events forall practical purposes.. The lecturer then explained how these tables were nspd, aod tlue working of life assurances asserting'that the business itself was the safest commercial undertaking that could be entered into, provided a -suf■'ficieat nuniberof lives were assured to give •effect to the law of average. But though was perfectly safe and certain, it had been attended by considerable *loss of late years. This, was principally because the 'people allowed themselves to be gulled by ■showy advertisements, published t<c onnts not worth 'the paper they were printed on, and plausible statements made by persons ■o-etting large commissions on the lives they assured. A man saw an advertise-, ment in the papers that a company was ■getting say L200.0Q0 a year, and paying :away only L 30,000 for "death claims, un 1 -at once he jumped at the coclusion that ; the office was a good one, wheieas if he knew anything about the matter he would; see that this was no test of its sonndiness. ; He 'would show that every office •received a larger amount of money every thirty-sevfn years -than it had to pay ■away. After thirty-seven -years, when thdeath come pouring in, ihings changed. An office was then called upon to j) iy s away more than it received. Tn proof of this he quoted from a speech of Mi- Gladstone in the Hosne of Commons, and went 'on to say that erne would scarcely credit' l the number of private compani' s that had "been* going smat'h " at home. During 'the last 25 years no -less than 32S private ■companies had fallen into difficu ties and •50 of them were now bein# wound up in --the Court of Chancery. The case of the Albert, which had bought up 22 private companies, and then became insolvent for a million and a quarter of money, was stated as an example in point. Mr Gladstone had taken the subject up in the House of Commons, ■ some six or seven years ago, and with • the approbation of the whole-countryhad introduced a Bill to ■enable the Government to undertake life •assurance, and that measure was now. working, and working satisfactorily., in England The suhject : was also taken up by The New Zealand Assembly, following in the footsteps of Mr Gladstone,; and a measure passed to enable our own Go c u•menUto'ta'ke up the business. And it was worthy of notice that the Bill pe.eived the unanimous and cordial support of all the' leading men of the House of every shade of pdlhical opinion. Security was of course 'the one great con-ideration of life assurance, and a Government was in a position to ■offer the very highest possible security, ■viz., the security of 'the State. A man thinking >over all the failures that hap- : . pened atOipme might hesitate before joining a iprivste company, but in going into a Govern :iient office he knew -what ht; was 'doing. Then again a Government was able to assure lives cheaper thun a private •company, because they employed their. <own officers. If he were to receive the ten percent, on the premiums of the lives he assured that the;private agents received, he would make a very handson?.e rnjomv; indeed. By the Bill referred to, there was a commissioner appointed, a p•;m merit officer, who was authorised to grant annuities, give . endowments to children,and contract for all kinds of life assurance. He next explained the nature mid advantages of immediate and deferred annuities, and then referied. to endowments, showing that a man paying L 6 17s for a child of two years, would get LI OO when, the child became 14. By paying L 4 lls per an ; num, LI.OO when 18 year--^, aod bypaying L 3 135,L100 when 21 years of age. If the child died, the money paid in would be returned. In all contracts with the. 'Government, a large portion of the money would be refunded after five years. Then there was life assurance proper. A man of 30 payinp L2 ; 6d a year, LI 6d halfyearly, 10s Id quarterly) or hy paying down. L 34 9s Cdin a lump sum, or otherwise by the payment of L7 6s a. year for 5 yeors, L4 4s .for 10 years, ;or L2 = J2s, for 20 years, -could insure his. life for. LIOO. A man •could insure iis life with, the .Government. and pocket *he money in his own lifetime. A man;of 30 paying. L4, 4s a year got the IL I OO yrh en he was 5,0 ; ; by i ng L3 os She would get it utSO, or K .for L2 14 wh.eti ihe was,6o, if,he ; li^edfso4ong, and if he, <lieti his family get the hundred pounds; Ejuring. every session of the As- ' semblyjiarepprt.was drawn up and accounts, were pr^sen^ed JHTpuse. by -the Comaussioaiw^.,.- All / tke . money,] top, ; that swas

collected" clid not, as many-thought, g 'into .^he --ordinary revenues but --wtv Itept at the bank Clodded- there to i« special" account. The— sums required to 'be drawn bad to, be : drawn ; , J^t* : r?" r iquisitibii "signed" 6y the ' Commissioner. dburiter-sig'n^d^Bj the : G6l(>nial i; l\'easurei % , and then it required to be presented to the" (Comptroller-general, who - "was to satisfy himself as to 'its ' Correctness/ in token of which it required.his signature, too. ; But the bulk. of... the- money,! remamedjin^the bank until the Assembly met, and: was then invested as. tbe member^ of the General Assembly thought fit.' 'ln pass in^ 1 the. Act:?the -legislature : seemed; to re? serve to itself jealously full power and con-: troll over the matter. The lecturer then showed- that ihe Government was insuring lives cheaper than any office in the colony; and in support of his statements quoted the following figures : — A man 25 years 6i age would have to pay for insuring his life for LI OO, without bonus or division of profits,, >Lll9s<7d to the Royal, LI 17s Sd to the Australian Alliance, LI 17s 8d to the London, Liverpool, and Globe, LI l?s 5d to the Victorian, LI 17s Id to the Northern, LI 17s 6d to the City of Glasgow, and LI 14s lid to the Governments He went on to prove that the so-called bonus system, so far from being any good, formed'a weak point in insurance. What, he asked, was a bonus? : [t was nothing more than a return of an over-charge with compound -interest.' You paid a larger sum to insure your lifein a mutual office, and you got that extra sum , back in the shape of a bonus. For instance, if a man insured his life in a mutual office at 25 years oi age for L3OO he would have to pay about L6'Bs,- whereas, to the Government he would only have to" pay Ls4s , the difference of 14s a year would come to LIOO in 20 years. But he (the speaker) thought the bonus system injurious in this way, that it led to excessive competition. One mutual office well-off declared a, bonus of say 10 per cent, on the premiums ; another office in more straitened circumstances, and not in a condition to do so, must declare as high a bonus or it would lose the public support and public confidence. There were other evils, connected with the bonus system which M'Culloch, in his Commercial Dictionary, referred to as follows : — " It would appear on a superficial view as if mutual assurance companies would be the most eligible to deal with; but it is doubtful if the advantages are not more than counterbalanced by the disadvantages. Everyone beinqr a partner has not only his own life assured, but is a part aspixrer of all the other lives, and if the affairs of the company get into disorder he mny incur some serious responsibilities. The management, too, ge's into the hands of a Junto, and is apt to be conducted without very muoh knowledge on the part of those interested. There is very much difficulty, too, in distinguishing between the rights of old members and of new ones." The Government scheme provides that all disputes shall be sefciled by arbitration — that the policy might be transferred after five years — that no stamp duly shall be chargeable on any receipts or other documents, and that the policy *hall be protected from the operations of the law of bankruptcy. These were some of the reasons why the Government scheme was so successful, and why so many were now availing themselves of the advantages which it held out— advantages which no private company could possibly provide. But the greatest reason of all others why he appealed to the public lor their support and confidence, was that the money was kept in the colony, and did not go away to enrich private companies at home or in the neighboring colonies. The lecturer concluded by making a forcible appeal to those present to assure' their lives, begging them not to procrastinate or excuse themselves l>v fancying- that they could not afford it. One shilling a week, paid by a "nan forty years of age, was all that was required to secure LI OO to his family, and almost every man in the colony could afford to pay that sum.