BUILDING SOCIETIES AND LIFE ASSURANCE.

Waikato Times, Volume III, Issue 130, 6 March 1873, Page 2

BUILDING SOCIETIES AND LIFE ASSURANCE.

Tju: following correspondence makes a proposition winch iswoithy of the consideration of building societies :—: — Punedin, December 12, 1872. Sir, — I have the honor to submit for jour consideration a suggestion which I believe, if adopted, would increase tho usefulness of building societies, extend the operation of at least one description o\ life nssurance, mid pio\e adiautagcous to a-class of pco.tle who, being generally of prondent habits and striung for dependence, deserve encouragement at the hands of a government having under its control an institution of bo> beneficent a character as life assurance and annuities. In my experience of tho management of building societies, many cases haio ocwimni of mortgagors (lying during the currency of their mortgages ; thereby causing great nu-on-venience and distress to tho survivors >n consequence of their inability to continue tho pauncnt secured by the mortgage ftftcr the decease of the head" of the family. Of course I am anaro that the Building Societies Acls gno no ppwento «uoh »O£ieties to enter into life assurance schemes ; but I submit that there is no reason w hy such societies should not accept life assurance policies as pnrt security for the repayment of moneys advanced lo their mem ben. The operation of permanent building societies especially, afford n suitable means for extending the use of short time policies. If the government should consider my proposition of practical vsluc, it would be requisite to prepare tables for short time policies from one to twelve jearn, for monthly, quarterly, half-yearly, and 3 early premiums, for the especial use of building societies The following will illustrate my suggestion: — The Union Permanent Building Society advances £100 on security of freehold or leasehold property, repayable in five jears by monthly instalments of £2 4s. Say the mortgagor is aged 40 the next birthday ; then, for the increase payment of £2 7* per month being scoured on tha property, tho society would covenant to reeomey the mortgage lo the heirs, 4c , of the mortgagor freed from all luture lepayincnts m case he should die during the currency of the mortgage ; anc^* to p»y to- his legal representatives the excess, if any, of th 3 insu/wnee money over the then present value, ascordhig to the redemption tables of the society, of such future repayments. At the time of applying for the ad\ancc, the borrower would be required to make proposal for the insurance m favour of the trustees of the society ; and on its acceptance, the «ociety should see to the payment of the premiums Tie following will represent the operation — Mortgage for £100, repayable by 60 monthly instalments, to cease in ease the mortgagor should not so long li\e. Mortgagor aged 10' next birthday. Died after making 24th paj ment. Society would receive the policy money, £100, and after deducting the redemption value of 3G pajments, £77 10s, would pay to the heirs, «X.c , of mortgagor, £22 10s, and grant to them a. reconveyance of property mortgaged It will be obvious that the operation, while advantageous to the borrower, would in oa-«> of ilea-lli So piofilable lo tlio society , but no mot* than is fair and reasonable for the prcfit and the responsibility of attending payments, and for remunerating it for loss of interest between the death o-f mortgagor and payment of the insurance money. The subscription money of such mortgage, w ithout insurance, would be £72 12-,. The office assets would be £G8 3s. If the suggestion I have the honor to submit should meet with your favoruble consideration, I shall prepare tables for the use of my society, and tale steps to have the matter brought before my members w ith tho icw to enacjng rules suitable for the purpose. The society w Inch I represent , however, is a smnll one. but building societies in the colony represent an interest of great aggregate and I feel] confident that the proposition would fiud favour among a, large number- of their borrow ers I have another suggestion in connection with the subject of Lifa As«iranc3 and the Immigration suid Public "Works Act, which I shall take an early opportunity of submitting to you, if I shall not be deemei intrusive for so doing. — I; lunc, <£c, M. "W. llawkins. W. Gitborne Esq.

Government; .Annuities Office, "Wellington, December 16, 1872. Sir, — T hare the honor to acknou ledge the recoipt of jour letter of the 11th instant, and to thank you for the \aluablc suggestions contained therein, that further facilities should be given for enabling life assurance policies, for limited teuns, to be taken by building societies as part security for the repayment of moneys advanced to their members I quite concur m the desirability of the object in view, and shall be prepared on my part to do what I can to facilitate its attainment. At present, in Table lof Government Life Assurance, as you will perceive m the enclosed pamphlet, thera are two col'Jinns for term policies, calculated for one year and for seven jeara respectively. I will at once direct the pieparation of tables for term policies from one to twehe veara, for quarterly, half-yearly, and jearly premiums. If building societies desire monthly paunents, they can easih make the necessary arrangements w it ti their members for that purpose. I shall be glad if you will make the eourso which I propose to take known to the society which you represent, and to others,, as opportmiitv may oiler, interested therein. Assuring you of my earnest desnv to utilise as much a» possible the Government Ins«uraneo Department in the encouragement of provident habits, and to give- effect to practical suggestions m that direction, — 1 have, JLc., W. GisTionxi:, Commissioner. M. TV. Hawkina, Esq,