LIFE ASSURANCE AND WAR.

Waipawa Mail, Volume XXXVII, Issue 7912, 28 July 1917, Page 4 (Supplement)

LIFE ASSURANCE AND WAR.

It is said that the life assurance companies of Australia up to December 31st , last paad claims arising from the war j to tho amount of almost a million and a quarter sterling. As there was at ; risk when the war broke out ninety-five j millions sterling-on lives between the | ages of 18 and 45 years, and assuming that not more than one-third of the j assured between those ages have gone I to the war, the “ Sydney Morning Herald” considers it safe to say that in two ! years of war on a risk of thirty-two mil lions, one and a quarter million Las been paid. How much of the amount paid was on insurance effected either on enlistment or since the war started, there is yet no means of ascertaining; but there is little doubt that the great majority of these claims paid we* on ; policies taken out before the war. ; These policies placed no restriction at j all on the holders, except such as w-re i at tho time of proposal in the porma- ■ nent military forces, when, in most ; instances, provision was made for an j additional premium in the event of the bolder proceeding on active service. It j may thus be sa d that with tho major- j ity of the claims there accrued to the j insurance office no extra payment c-n account of the greatly enhanced r'sk j of war. lienee there has been a falling- j off in the* amount of profit distributed to each policy holder, and that falling- , off would have been greater had not , tho heavier claims been off-set to some ' extent by a heavier rate of interest ! earned. Tho life assurance offices have, on most of the claims, been piv'd seme : years’ premium, up to, perhaps, 20. and j tlicro has thus been a substantial but I by no means adequate payment for the | risk run. Inasmuch as the policies, ; with the exception mentioned, were is- | sued without restriction —and wisely ■ so, too, because life assurance was ' thereby made more popular—the losses duo to the war have been distributed j among the whole body of pokey bold- . era. While admitting it to be fitting 1 that the whole body should bear the ; burden of their fellows wiio have sacri- t fiecd themselves, our Sydney contemporary formulates this further question: Should the policy holders assume the burden, or any part of the burden, ; accruing from those assured who enlist now, and who have only become nssur- i e<l since the war? To these newly- J assured who enlist, varying rates, we are informed, are being charged from C2 to £*lo per £IOO of assurance, ill addition to the usual picmium. Does this extra premium cover the risk of 1 war? that is to say, will the sum collected from the whole of those who i so assure their lives pay the claims < f 1 those who lose their lives and are killed, and pay the cla ms after the war arising from deaths which occur earlier • than they otherwise would owing to the , strain undergone in war? If the total premiums do nut pay these claims, then the extra premiums do not cover the J risk of war. This is not, it is urged, :* matter which can be left to the nctu.ir- • ies to decide. In peace time, though the life of the individual cannot be pro- j "dieted with certainty, yet if a suffi- ! cicntly large number of individuals is taken and their ages are known, the ! number who will d : e in each succeed- | ing year can be predicted with certain- j ty. It is a matter of mathematics de-

duced from the experience of many years. But who can measure the proportion of deaths which will take place in this war? It is outside of all experience. If the additional premiums ;harged are not sufficient, it means that heavy looses will fall on the other assured, and there is no means of ascertaining whether the additional premium charged is sufficient until the experience has been gained and the loss incurred. The result w ill be that the burden < f life assurance of those killed in battle or dying on account of the war will l*e borne by the members of life assurance societies, instead of by the community ns a whole. The point of our contemporary’s argument is that it is pre-eminently the duty of the community as a whole, and not of one section, to assume the burden of those who sacrifice themselves for tho community. “That,” it says, “is recognised in the pensions which are granted. If a man wishes to make provision beyond tho pension lie should bo able to do it on reasonable terms considering tho risk run. Those British offices which are writing policies for men serving at the front .ire charging up to .€2oper year extra for each £IOO assured. The lowest is £lO, and that only on n certain class of policy. Even the lowest rate would be a heavy burden to the man of ordinary moans who enlists. Yet, apparently, if any lower rate is quoted end an office accepts lives freely at that lower rate, then it will have heavy losses. Th.o whole matter wants to be placed on a business footing.” This is a reasonable contention; but, unfortunately, it is not supported by any suggestion as to how the end desired is to be attained. In our opinion tho problem is incapable of solution without the co-operation of the State, and it is, we fear, rather late in the day, so far m tho war is concerned, to ask the State to undertake this additional duty ami responsibility. However, there is much virtue in the old axiom, “Better late than never,” and it is possible that if tho assurance company's were to manifest a disposition to work with the Government in the matter of war insurance, it might yet he possible to evolve a sound and satisfactory scheme under winch the community as a whole would carry the burden of tho war loading on soldiers’ policies.