TONTINE LIFE ASSURANCEWHAT IS IT?

Wairarapa Daily Times, Issue 1742, 22 July 1884, Page 2

TONTINE LIFE ASSURANCEWHAT IS IT?

Tontine assurance derives its name from the original founder of annuities and life assuranoe, one Lorenzo Tonti, a Neapolitanite, who flourished in about the middle of the 17th century, his first plan being as follows; A certain number of persons clubbed together a specified sum, which -was invested, and the interest at the end of each year was divided amongst the subscribers who were living, and so on from year to year, the number gradually decreasing, until the last survivor received the whole of the interest until his death. The scheme had all the appearance of a profitable investment until after the death of the last annuitant, when inquiry was made as to what became of the principal sum, for which there appeared to be no owner, and it was found to have been appropriated by the founders of the scheme. This proved fatal to the plan, and thereupon a modification of the system was adopted. A tontine was fixed to continue a certain number of years, and the entire amount was to be)

Ftfjsivsd fey member who last survived.. •' ...

The present system of Tontine life assurance differs materially from the plans above mentioned as originated by Tonti, and combines the advantage of life assurance with a portion of the element of the Tontine system,' and as we understand, it is as follows Tontine policies are issued at the same rates and under'the same conditions as ordinary life assdrance under the " with profit" scales, with the exception that if the assured die within the continued period, say 10,15, oi' 20 years, as the case may be, his representatives will only receive the full amount of his policy without any profits attached. Those who discontinue their payments, andthus allow their policies to lapse, receive no surrender value, nor any.profits attaching to their policies, but one calendar month's grace is allowed on payment of a fine. The members who survive the Tontine period, having kept their policies in force, then participate in a division of the accumulated profits of the Tontine, which are much larger than under the ordinary plan, and can be drawn in cash or added to their policies, or in other ways which will be found in the prospectus of the society mentioned below. This appears to be a fair and equitable plan, as there is no loss to those who die early after having paid only a few premiums; in fact their representatives are considerable gainers by receiving the full amount assured, while those who survive the period, and have thus contributed to and earned the profits, are entitled to reap the full benefit thereof.

It will be seen by reference to our advertising columns, tlmt the Tontine investment policy system, combining an investment for capital protected by life assurance, is for the first time offered in New Zealand by the Colonial Mutual Life Assurance Society, which was established in 1873, and is incorporated under the Acts of Great Britain and the Australian Colonies, This office had been very energetic and successful in its operations, and has accumulated a large amount of funds, which are all invested in the colonies. It has a branch in each colony on a federal basis, and is enabled to issue policies without delay and pay all its claims on the spot immediately on proof of title, Its policies are peculiarly free from all harassing conditions and restrictions as to travel, residence, occupation, or mode of death, and we understand the Tontine system is being pushed with that energy and perseverance which has hinherto characterised the management of this office. Although a new feature in this much-assured colony, the Tontine system has been in practice for the last 10 years or more in America and England. It has met with very considerable success in the older countries, and has be> come deservedly popular, as it ensures much greater profits to those who liye out the period selected, and whose contributions earn the profits, while those who are unfortunately taken at an early period, leave a substantial benefit to their heirs of the full amount assured.