“JOB TALK”

Hauraki Plains Gazette, Volume 53, Issue 32411, 24 March 1944, Page 3

“JOB TALK”

ADDRESS TO ROTARY CLUB VALUE OF LIFE ASSURANCE SERVICE THROUGH BUSINESS As a means of making the organisation representative of the varied business interests of a community a Rotary Club selects its membership on the basis of one active member from each worthy and recognised classification of business and .professional activity in the community. Each member is looked upon as the representative in the club of his vocation and is expected to -present the views of his particular cross-section of the community and to take-back to those engaged in his calling the high ideals of Rotary so that all people may come to regard their own work as their opportunity to express themselves in service to society as well as a means of material gain. Every man’s work is of some value to the whole community and to advance understanding, goodwill and happiness each member of a Rotary Club is expected to give a 'brief “job talk.” Thus the speaker at this week’s meeting of the Paeroa Rotary Club was Mr W. P. Wylde whose classification is life assurance.

In opening, Mr Wylde saia that practically every man had some life assurance, but in most cases, while the amount was woefully inadequate, they did not increase it because they did not give any thought to the matter, and if they do so, they missed the idea because of the first re-action—it would cost them some money. Because few people thought about life assurance there were many misunderstandings and false ideas.

Buying of Assurance The subject being a very wide one it was difficult to know what aspect to deal with in the short time available. ' First, the buying of life assurance. As in buying anything else which may cost many hundreds of pounds, Mr Wylde urged even the business and professional men he was addressing not to take the first that was offered because it was offered by a friend,, or by' the representative of a firm which was thought to be a good one. Investigate and select the best proposition. Get it in writing or study the matter from recognised year • books. Agents are paid by commission and they may not be here tomorrow and it is no use complaining at some future date that, “the agent told me so-and so.” Remember, you make and sign a proposal to the assurance company and it accepts or rejects this proposal. If it accepts the proposal it issues a policy. Strange as it may seem, many people do not read even the main points of their policy, but argue 20 or 3'o years later that the agent told them it was so-and-so. No company is bad, but this cannot be said for all agents. Life assurance is advocated by every right-thinking man. St. Paul the Apostle, in his First Epistle to Timothy wrote (chap. 5, verse 8): “But if any provideth not for his own, and specially his own household, he hath denied the faith and is worse than an unbeliever.” Advice of Government There were many quotations, but two would suffice. The gathering being of Rotarians the speaker referred to the inside cover of the November issue of “The Rotarian” where the U.S.A. Government advertising on the subject of the prevention of inflation advocated seven things: Buy only what you really need. Pay no more than the ceiling price. Pay off old debts and avoid new ones. Support higher taxes. .. 'Provide for the future with adequate life assurance and savings. Don't seek more money for goods and services. Buy all the war bonds you can afford. And Winston Churchill: “If I had my way I would; write the word ■‘lnsure’ over the door of every cottage and upon the blotting pad of every public man because' I am convinced that for sacrifices. that are inconceivably small, families can be secured against catastrophies which otherwise would smash them up for ever. It is our duty to arrest the ghastly waste, not merely of human happiness, but of national health and strength which follows when, through the death of the bread-winner the frail boat in which the fortunes of the family are embarked founders and the women and children are left to struggle helplessly on the dark waters' of a friendless world.” The U.S.A. Government nationwide advertisement urges the restriction Of buying of all things except life assurance and war bonds,

and it puts life assuance higher on the list than war bonds, for it well knows that the life offices are now investing the whole of their surplus incomes in the war loans. Mr Churchill points out that it can be done for sacrifices which are inconceivably small. Policies had been sold in this town for 6d a week and for £lOO a year and the only difference in the contracts was the amount of the assurance.

Mr Churchill had used the word “insure” but life assurance men prefer to restrict “insure” to those risks which might happen and to use “assure” for those which will happen. One insures again fire, accident, shipwreck, etc., ■which might happen but in life assurance the person will either reach the stipulated age or will die beforehand —one or the other is bound to occur. Insurance is an indemnity against loss and if the contingency occurs assessors determine the amount of the loss and this amount is paid. But in ilfe assurance the proposer himself determines the amount that ■will be paid. Yet some men have such a poor idea of their own value as breadwinners that they think a couple of hundred or so of life assurance is sufficient to enable theii’ dependants to continue, in the event of their death, in the way of life to which they have accustomed them. They think that their business is sufficient, there is still plenty of time to save up for the days of their retirement or that the old-age pension will suffice. No- matter how admirable the thrifty intentions of the saver, his savings programme may ibe of little avail unless it takes into account the real possibility of death. The success of any purely “savings”

programme depends directly on the continued ability and activity of the saver. In justice to one’s self and to one’s family no optimistic savings programme should be entered upon without the safeguard' of life assurance protection, because if he loses—the family pays.

Life Statistics A few years ago the- New Zealand Government Statistician made the statement that history showed that of 100 men aged 25 there would be, when they were aged 45, but one rich man, 53 would be in comfortable jobs, 22 would have nothing and 14 would be dead. At age 65 there would still be only one rich man, seven would be well-to-do, 50 must still' work or accept charity (pension) and 42 would have died. How many men having, say £506 of life assurance, pause to think that at their death their income will cease and their widows will be given a sum equal to £lO a week for a year or £5 a week for two years etc. If the widows did not live on the capital but invested it at 5 per cent, it would return them Is 41d a day. To demonstrate’ the service of life assurance let us take an example. Suppose a man of age 25, with a wife and the beginning of a family. He has a small income but the rightideas. He effects a family income endowment policy with options at maturity at age 60. It is for £lOOO and the annual cost is £3o' f)s 2d which is Is 8d a day. It was taken out prior to the war, it is in full force now,but if effected, since war was declared it contains a war risk condition to the effect that should death occur while overseas in the Armed Forces, or as a result of the war, within six months of returning to New Zealand, the benefit is a return of premiums only with interest. Family Protected Supposing he died in three months’ time. His widow would receive £lOO together with one year’s bonus, say £2O, together with the first of 237 monthly instalments of an income of £l5O a year still 20 years from the date the policy w r as effected. The total proceeds would thus be:—lnitial payment as above £l2O, plus 237 monthly cheques of £l2 10s and (when the monthly payments cease) the sum assured, £lOOO, total £4082. The family income benefit commences at the assured’s death if within 20 years and is paid till 20 years from the date of the policy, thus his dependents have very great protection in the event of his early death and when the needs of his family are greater.

Supposing the man lives. Throughout his life he has the protection of a policy of £lOOO and bonus. He has claimed income tax exemption (at least 3s 4d in the £ on the £3O 9s 2d £5 Is 6d). He has the knowledge that should he desire money at .any time he can borrow on the policy from the company or use the policy as collateral security at a bank, or that he can surrender the policy for cash, or surrender the 'bonus or part of it for cash. He knows that he has sound investment which no-one but himself can attack, even in the event of bankruptcy, and he knows that

should he not desire or be unable to continue 'premium payments he has a guarantee that —without any application or action on his part—the policy will be kept in force as long as the cash surrender value is sufficient to pay the premiums and interest, that he can draw the guaranteed cash surrender value or have the policy converted into a free policy for the proportion of the sum assured which he has paid for. Encyclopaedia Britannica At age 60 the policy will mature. Throughout he has received bonus certificates. These bonuses vary from time to time according to the profits made and between various companies they vary very considerably. It is futile to consider one year’s bonus or to predict what they will be in the future. The method used by the speaker’s company was to quote actual past results. The man of 60 today who took a policy at age 25 must have done it in 1909, thus it had existed through the periods of the Great War, the influenza epidemic, the boom, the slump and part of the presi ent war. The actual bonus on such a { policy was £797, thus the policy was I worth £1797. Incidentally, 35 annual premiums of £3O 9s 2d is £1066 0s lOd so his cash gain is £731,a return on his investment of £1 14s per cent, compounded annually. Other types of policies show a higher return. When he is 60 he is offered any one of the following options:—(l) £1797 in a lump sum; (2) £ll 12s 6d a | month for life; (3.) £ll 0s 6d a month ' for life but for 10 years certain;- (4) I an income for any number of years I from 2 to 20. At two years it is i £77 3s 6d a month and at 20 years it is £9 18s a month. All this for a savings of Is 8d a day. The speaker concluded with two more quotations:— The Encyclopedia Britannica. —The value of insurance as an institution cannot be measured by figures; No direct balance sheet of profit and loss can exhibit its utility. The- insur ance contract produces no wealth. It represents only expenditure. If a thousand men insure themselves I against any contingency then, whether ' or not the dreaded event occurs to any, they will, in the aggregate be poorer, as the direct result, by the exact cost of the machinery for effecting it. The distribution of property is changed, the sum is not increased. But the results in the social economy, the substitution of reasonable foresight and confidence for apprehension and the sense of hazard, the large elimination of chance from business and conduct, have a supreme value. The direct contribution of insurance to civilisation is made, not in visible wealth, but in the intangible and immeasurable forces of character on which civilisation is founded.”

Calvin Coolidge.—“lnsurance is the modern method by which men make the uncertain certain and the unequal equal. It is the means 'by which success is almost guaranteed. It is part charity and part business, but all common sense. Through its operation the strong contribute to the weak and the weak secure, not by favour, but by right duly purchased and paid for, the support of the strong. Every insurance policy is a declaration of independence, a charter of economic freedom. He who holds one has overcome adversity. Everyone knows that it is not what is earned, but what is saved, which measures the difference between success and failure. The ability to save is based entirely upon self control. The possession of that capacity is the main element of character. It passes over at once into the realm of good citizenship. He who sells an insurance policy sells a certificate of character, an evidence of good citizenship, an unimpeachable title to the right of self-government.” The vote of thanks to the speaker was proposed by Mr R. L. Darley who congratulated Mr Wylde on the thorough grasp he had of his subject, assuring him that his address had been very interesting to all.