Page 6 Advertisements Column 4

New Zealand Herald, Volume XXII, Issue 7402, 10 August 1885, Page 6

Life Insurance. THE AUSTRALIAN MUTUAL PROVIDENT SOCIETY AND ITS AMERICAN COMPETITORS. The following correspondence, which appear* In the Sydney Morning Herald, on the relative merits of the bonus-producing powers of the Australian Mutual Provident Society and the Equitable Lifo Assurance Society of the United States, will be of interest to those assured in both offices. AUSTRALIAN MUTUAL PROVIDENT SOCIETY. Bead Office, 87, Pitt-street, Sydney, 27th June, 1885. Dear Mr. Kelly,—lt Is a matter of current report that you hold policies for considerable amounts in th o two American offices now transacting business in these colonies, and I know that the manaeer of one of these cffl has stated that a Bonus Certificate received by you has disclosed results that ' ought to bo raaHe wid ly known." The Bonus Certificate for the year 1884 attaching to your Policy, No. 104,245, with this Society will to-day be issued you ; and, M you are deeply Interested Id the Society, you will no doubt institute a comparison between the bonuses allotted by the three offices. I shall be glad if you will be kind enough to favour me with particulars of the policies effected by you in the American companies, and of the bonuses allotted, in order that I may tnikfl a similar comparison. Personally I hive little doubt of the result of such comparison: and I shall esteem it a favour if you will give me permission to nuke such result public. Faithfully youri, Morrios A. Black, Actuary. T. H, Kelly, Esq., 67, Pitt-street. Sydney, 3rd July, 1885. Dear Mr. Black,—l hand you herewith results of the Kqnitable Life Assurance Society of the United State , and of the New York Life Insurance Company, for the year 1884. so far as I am concerned. The difference in the amount* of premium arises from diffjremce In age, one being for 63 years and the other 54. I X have no objection (to the publication of the figures. Yours truly, T. H. Kelly. ] Morrlce A. Black, Esq., Australian Mutual Provident Society. The following are the particulars relating to the Policies on the life of T H. Kelly, Esq., of Sydney, referred to in the foregoing correspondence In each case the Policy is an ordinary whole life one; they were all effected in 1884. One annual premium has been paid on each, and one year's bonus allottod to etch. It is not thought necessity to make any comment on these figures. It it confidently believed that they cannot fail to cinvince the mo t sceptical of thi superiority of the Australian Society. ©o o | |o o © "j "So 22 I «jj I "22 ® O < on CI ®5 I O* laj-it- > SCO lOp- « J 3 ac 3 ' S a c °" 0 ■ J'ilg = °°° 1 -2 x-2 o S - j fcg ■§*.§ ®3<£ a aC— r-< y-i r-4 r-* 7} St *" a ,00 00 I n ►*3 H * I -c 3 13 s ! s|| 5 n 2 ** 5 j £ < <4 1 °\ £ < ____ 'J2 _ . _ ... « a c 0»h0 J : • 3~ 3 » N "5 2b "3 "3 r "' "* o 3a. CI on * *•? X & s S* 9 I O —_ _ o QC # _ m .cc « "c "3* 8? I 6 3'| » fl o 5o 5 B „ g fc §2 2° 10 § ml M 5 5 Ci] ° * > Z << -si s o c "3 - & : 11 § i;s 8 """ ■*» *3 2; ® -2 a -S^ls ° - *3« 0 a ° o-gS 1 2J o2 f S s 5 £ "Q fc 2 *3 IS "■ c 3 £ a g*s a y. ■*. The above figures are not estimates, but are the result of the experience of the first year i business ef the American offtcjs in Australia M. A. Black, Actuary. Australian Mutual Provident Society. Head Office - 87, Pitt street, Sydney, 4lh July, 1885. THE EQUITABLE LIFE ASSURANCE SOCIETY. 26, Queen-strret, Melbourne. 11th July, 1885. Dear Mr. Kelly,—l have perused the comparisons of r.sults given by Mr. Black, tho actuary of the Australian Mutual Provident Society, in the Argus of this date, and would point out that he has ignored tho following facts, which has a very important bearing, upon th? question, viz.:— firstly—l'he premium paid by you to the A.M.P. Is very much larger than that paid to the Equitable. Secondly—That th i A.M. P.'s policy is a tontine — i.e., the bonuses are contingent, and not absolute, as in the case with the Equltablo policy you hold. If, instead of paying us £542 18s, you had paid us £587 10s the rate you pay to the A.M.P., the compari.on would stand as follows, via.:— teed'" | Bonns - | ToUL I £ |£«. d. £a. d. Equitable .. .. 10,821 105 0 0 10,920 0 0 To the A M.P. you ! lay £293 15s for i £6000 £587 10s for j £10,000 .. .. 10,000 |216 8 0 10,216 8 0 Difference in favour of the Equitable £709 12 0 Or, rather, this would be tho difference, provided the bonuses of the A M.P., cash and reversionary, vested at once, as with the " Kqultable." But the'r bonuses do not so vest, i t., are not payable at all, unless the life survives a fixed tontine period, and If you now apply to that society for the cash value of your bonus, you will find that is is not payable ; or, if you die at any time within their tontine period, your heir* will only receive the sum assured, and not, as with the " Equitable." the sum assured with the bonus added (£10,926). So that the real difference in favour of the Equitable, 10 far as absolute assurance goes, is £926. With regard to the apparently larger bonus given by the New York Life office, the fact that you pay them a larger premium Is of it<elf sufficient to account for the difference. I Mr. black is thus going out of his yay to make an unprovoked and also unfair attack npon a rival institution. by means of comparisons which might be pardonable if made in Ignorance by a canvassing agent, neither upholds the dignity of his profession nor the status of his society. As an actuary. Mr. Black should be aware of the important bearing in a comparison of this nature of the actual amount of premium payable upon the bonus, and the suppression of the ftct that the policy of the A.M.P., if tontined, is mjre ingenious than candid. Faithfully yours, R. Hope Aik:Nsojj, Manager. T. H. Kelly, Esq., 67, Pitt-street, Sydney. AUSTRALIAN MUTUAL PROVIDENT SOCIETY. Head Office, 87, Pitt-street. Sydney. 17ih July, 1835. Dear Mr. Kelly,—ln answer to the argument by which Mr. Atkinson endeavours to prove the superior advantages offered by the Equitable Life Assurance Society of New York as compared with the Australian Mutual Provident Society, it will probably be sufficient to point out that the rates of premium charged by the latter at all age* over 45 are actually less than those of the American office, Thus at age 50 the premium to ass re £100 in the Mutual Provident Society is £4 9* lOd ; while the Equitible rate is £4 lis 4d At age 55 the respective rates are £5 12s 2d and £5 19s lOd, frorp .which it will be seen that a person assuring at the ago of 55 next blrthd y would get a policy In the A.M.P. Society for £10,684 for th" same premium which would assure £10,0j0 in the Kqultable. These are facts which tho public can verify for themselves by consulting the prospectuses of the two offices. Mr. Atkinson has not thought proper to note in his comparison that your assurance was effected in his offl:e some four months before the policy in the A. M. P. Society was taken out, and that there was, as you are aware, a difference in age. one being for 53 years, and the other for 64 The effect of this was to make your annual premium payable to the Equitable Society £27 10s less than it otherwise would hive been. When this is takon into account it makes Mr. Atkinson's comparison of what the respective premiums would assure simply nonsense. But even taking the actual premiums paid by you to the two offices it Ban easily be'shown-that the net cost Of a jeaxA assurance is considerably lets in the A.M.P. ti(*Bty than in the Equitable.- Thus, assuming your poflcv to be for £10,000 in each offioe, the results will Da as follows :— ——. Annual Cash Net cost of Premium. Bonus, Asnurance £ a. d. £ s. d. £ ». d. A.M.P. Society.. 587 10 0 105 0 0 482 10 0 Equitable Society 512 IS 0 60 0 0 492 18 0 It will thus be seen that (Mr. Atkinson's figures notwithstanding) your assurance in the A.M. P. Society costs you £10 8s per annum less than in the Equitable. If Mr. Atkin»on can get away from these figures I shall be happy to hear from him. At our interview I explained that your bonus did not vest until the expiration of tiro (2) years from the date of the policy—that is to sav, you cannot draw the cash value until your policy with us is two years old, but you can draw It from the Equitable at the end of the first year of assurance. But does that circumstance alter the fact that a £10,000 policy in the A.M.P. Society would cost you £10 8s per annum less than In the Equitable ? And this is tho question that intending policy holders have to ask themselves in judging of the relative advantages to be derived from the respective offices : Is a c*sh bonus of £105 on a £10,000 policy in the Mutual Provident, payment o' which Is deferred a year, more or less advantageous than one of £50 from thelEqultable not so deferred. And what has Mr. Atkinson to say to the cash bonuses (double ,in amount to those in the Equitable) which you will receive eaoh year for perhaps 20 years, after the two (2) years' probation has expired? What will be the relative conditions of the two policies five or ten years hence ? As the Equitable Society has assumed the prophetic instinct in regard to tontine policies, perhaps Mr. Atkinson will answer these questions? Mr. Atkinson's statement that the bonuses on the A.M.P. Society's policy do not vest until the policy has been two years in force is quite true ; it is equally true that the Equitable'a b nui is not available till the end of one year ; but to say that there Is any element of tontine in these facts is to force on mo ene of two conclusions—neither of them is complimentary to Mr. Atkinson, so I refrain from stating them. And why should Mr. Atkinson complain of the publicity I have given to this matter ? Did he not write to the Melbourne Manager of the Equitable Society, expressing the opinion that these results ought to be made widely known, and am I not making them as widely known as I can ? Let it be once for all known that profit In a life office cannot be produced by any feat of legerdemain. Other things being equal, tke office which conducts its business at the least expense, and realises on its investments the highest rate of interest must produce th* largest rate ot profit. Lot us see bow ,