TONTINE V. ORDINARY LIFE INSURANCE.

Dominion, Volume 3, Issue 878, 26 July 1910, Page 4

TONTINE V. ORDINARY LIFE INSURANCE.

'Sir, —A cutting from your paper of June 17, _190Uj entitled "Life lnsuraneo Methods," lias been sent me, the sender very probably being aware that I, with many others in Auckland, felt ourselves victimised through the misrepresentations made many years ago by agents of a certain life assurance company doing, business on supposed true 'i'ontino lines. Some twenty-five years later the servants of this company did a large business here, and in otluy places, largely duo to tile very wondertill representations with their future extraordinary results that each policyholder, at the expiration of his fifteen or twenty year 'i'ontino period, would receive. So highly-coloured were these results, that many people allowed pood whole life policies in other companies to lapse, so as t-o secure a so-called Tontine one, in which the division of profits at compound interest anil return of premiums to those who survived the period, well, was something wonderful. But alas, alas, the wonderful good thing was only a myth, and the survivors of these Tontine periods have now reaped tlie fruits of a bitter disappointment. No case in my experience, and I have letters from a large number of sufferers, has resulted satis- . factorily. The position that tho policyholders were placed in, not knowing anything of the bonuses or profits until the expiration of their .so-called Tontine period, was a very unfair one, for many of us would have surrendered our policies had wo known how badly things wore going. The company must liavo known , how bad the results would bo, because, for about the last eight- or nine years, they have not issued any of these policies. Here are tlio results of two cases iu Auckland for a twenty-year Tontine period—amount assured in both cases £250: A in twenty years pays premiums of £124, and is offered at the close tho' magnificent bonus of £14 165., or an annuity of £5 18s. lid., or .a surrender value of .£7l 7s. B premiums of £146, his cash bonus is £13 145., annuity £6 los. Bd., aud surrender value £71 Bs. There is a marginal differenco even here, yet the surrender value is Is. 'more in tho latter case, against an increase of paid-in premiums of £22. In each case, the company lias had the use of the premium and profits at compound interest for twenty years, and yet can only show such miserablo bonus results. ' Thoro is something wanting in this, and that is what tho policy-holders are wanting to know. To my mind, the true principle of Tontine has not been carried out. True Tontine principle is nearly tlio converse of ordinary life assurance, where it is the man who dies that obtains an advantage for his heirs at tho expense of tlio long liver. A petition from a number of Auckland policy-holders was laid before tlio House during the soason of 1908. It was referred to the Accounts' Committee to investigate, and there it apparently remains, in the meantime. Owing to it shelved, these policy-holders havo had to take'what the. company choose to give them, and aro now out of court. — I am, etc., THOS. J. M'IVOR.