LIFE INSURANCE BONUSES.

Press, Volume LIV, Issue 9736, 26 May 1897, Page 2

LIFE INSURANCE BONUSES.

TO THJt KDMOR 6FJMJ* PftSS£ Sir, —In your issue of the 15th instant there appeared a letter from a policy holder of this department in wliich strong exception was taken to the bonus results of a policy oil his life, and as a , false impression is lively to arise therefrom I; woulq ask permission to place the true state pi aflairs before your readers. -X * The p*olicy referred to* was taken out in the year 1873, when the department's premiums was so extremely low that no bonuses were" expected to accrue f roni them. Indeed, the prospectus then in use expressly stated that the premiums were as low as was consistent with safety, and if this policyholder writ-refer to the policy in hie possession he will find, perhaps to his surprise, that it contains no mention whatever of. any participation in future profits. Yet it'will hardly be credited that, although the premium is lower than that for a policy with- , out profits in the largest -private office in ' the colonies, the original sum of £1000 has been increased by bonuses to £1381. The total premiums paid have amounted to exactly £500, and the policy is now free of any further -payments. If the policy today became a claim the bonus additions (£381) would amount to 76 per cent, of the premiums paid, and although your correspondent pessimistically hints*at. the possibility of there being no bonuses in another nine years, it ja far m,ure probable that the bonuses added to the policy will by that time exceed the total amount which be has had to pay in the form of premiums. It is a matter, for deep regret that any policy. holder should , by injudicious: and unwarrantable statements, damage his own office merely because of inevitable fluctuations' in his bonuses, the result of cautious action .taken upon the highest in the interests of policy holders, and this more especially when it is considered that, as I have clearly pointed out, the results he is obtaining are better than could have been secured elsewhere.—Yours, &6., ', J. H. RICH^ROSOU , , .Commissioner. Wellington, May 22nd*