BUILDING SOCIETIES AND LIFE ASSURANCE.

Southland Times, Issue 1687, 10 January 1873, Page 3

BUILDING SOCIETIES AND LIFE ASSURANCE.

*W# frdifagty comply iritn a fttqoMt to ferpablish the following correspondence :— Dunedin, 11th December, 1872. The Honorable William Gisborne, Esq , Commissioner of Annaitiee, Ac., Ac. Sir, — 1 have the honor to submit for your consideration a suggestion which, I believe, if adopted, would increase the usefulness of Building Societies, extend the operation of at least one description of Life Assnrance.and prove advantageous to a class of people who, being generally of provident habits and striving independence, deserve encouragement at the hands of a Government having under its control an institution of so beneficent a j character as Life Assurance and ! Annuities. S In my experience of the management of } Building Societies, many cases have I occurred of mortgagors dying during the currency of their mortg»ges ; thereby frequently causing great inconvenience and distress to the survivors in consequence of their inability to continue the payment secured by the mortgage after the decease of the head of the family. Of course I am aware that the Building Societies Acts give no power to such Societies to enter into life assurance schemes ; but I submit that there is no reason why such Societies should not accept life assurance policies as part security for the repayment of moneys advanced to their members. The operations of Permanent Building Societies especially afford a suitable means for extending the use of short time policies. If the Government should consider my proposition of practical value, it would be requisite to prepare tables for short time policies from one to twelve years, for monthly, quarterly, half yearly .and yearly premiums, <br 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 years by monthly instalments of £2 4s Say the mortgagor is aged 40 next birthd »y ; then, for the increased payment of £2 7s per month being s«?uwd on the property, the Society would covenant to reconvev the mortgage to the heirs, Ac, of the mortgagor, freed from all future repayments in case he should die during the currency of the mortgage ; and to pay to his legal representatives the excels, if any, | of the insurance money over the then present value, according to the redemption tables of the Society, of such future repayments. At the time of applying for the advance, the borrower would be required to tnak* a proposal for the insurance in favor of the Trustees of the Society ; and on it* acceptance, the Society should see to the payment of the premiums. The following will represent the operation :— Mortgage for £100, repayable by 60 monthly instalments, to cease in case the mortgagor shall not so long live. Mortgagor aged 40 next birthday. Dies after making 24th payment Snci»ty would receive the policy money, £VO t and after deducting the redemption value of 36 repayments. £77 10s, would pay to the heirs. &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 j in case of death he profitable to rlie Society ; but not more so than ia fair and reasonable for the trouble and responsibility of attending to the payments, and for remunerating it for the loss of icteivßt beween the death of the mortgagor ami payment of the insurance money. The redemption money of such mortgage, without insurance, would b? £72 12m. The office asset would ><c £68 3* If the ««ug2e*tion I have the honor to submit should meet with your favmvble consideration, I shall prepare tables for the use of my Socif ty , and take steps to have the matter brought before my mem- j bers with the view to enacting rules suitable for the purpose The Society which I represent, however, is a small one, but Building Societies in the Colony represent an interest of great aggregate value, and I feel confident that the proposition would find j favor among a large number of their borrowers. I have another suggestion in connec tion with the subject of Life A»«uranc and the Immigration and Public Works Act, which I shall take an early opportunity of submitting to you, if I shall not be deemed intrusive for so doing. — I have, Ac, M. W. Hawkins

Government Annuities Office, Wellington, December 16, 1872. Sib, — I hare the honor to acknowledge i the receipt of your letter of the I lth intt . and to thank you. fur the valuable suggestions contained therein, that further facilities should be given for en abling Life Assurance policies, for limited terms, to be taken bj Building Societies as part security for the repayment of moneys advanced to their members. I quite concur in 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 I of Government Life Assurance, as yon will perceive in the enclosed pamphlet, there are two column* tor term policies, calculated for one year and for seven years respectively. I will at vnce direct the preparation of tables for term policies from one to twelve yean, for quarterly, half-yearly, and yearly premiums. If Building Societies desire monthly payments, they can easily make the necessary arrangements with their members for .that purpose. I shall be glad if you will make the course which I propose to take known to the Society which you represent, and

to others, as opportunity may offer, interested therein. Assuring you of my earnest desire to utilise as much a* pxJMfbto the Gorwn* raent Insurant© Department in the «n eouragement of provident habits, and to give effect to practical suggestions in that direction. — I nave, Ac., W. GiBBORWfi, Commissioner. M. W. Hawkins, Esq., Secretary and Actuary, Union Permanent Building Society. Dunedin.

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