LIFE INSURANCE BONUSES.

Press, Volume LXIV, Issue 19462, 8 November 1928, Page 12

LIFE INSURANCE BONUSES.

, The question has been raised by polieylolders of the Australian Mutual Provident Society whether, as the mortality experience of the organisation was much lower than that allowed for in'the conduct of the business, the concession of a reduction in pre--mwffli could not be made. The actuary of the Society (Mr O. A. Elliott) has furnished directors with a considered reply. He writes that white it would be possible for the Society to reduce the premiums charged, Jl had to be realised that new' entrants would receive a very much smaller' bonus than those allotted to existing policies, proTided that the lower premiums were, chargeable only to them. If premiums were reduced all round so as to cover existing members as well as new members, a vast amount ef labour would be involved in calculating the- new. premiums. - Disappointment also: wonld be felt by -persons who had been in-'; dueed to assure on account .of .the reputation: •f the Society *>r paying large and increasing bonuses. If premiums were reduced to th« full extent that the present rates of bonus might appear to warrant, it might easily happen that at some future time an increase In the rate of mortality, caused by war or epidemic, or a decrease in the rate of interest, might make the reduced premium* insufficient. It would then be neces•ary to increase them. That would cause . arrest ditaatisf action and , probably some hardship. The actuary concluded by saying that on the whole it seemed wiser, and it was certainly safer, to keen the existing method of charging the original premiums and returning the amount not required in the shape of additions to the sums assured. Sfembers were accustomed to it. it was the ; method in use when they joined the Society, | and probably many of them would strongly «bjeet if any attempt were made to change