CAPTAIN BALDWIN'S LECTURE ON LIFE ASSURANCE.

Westport Times, Volume VI, Issue 922, 3 February 1872, Page 2

CAPTAIN BALDWIN'S LECTURE ON LIFE ASSURANCE.

We resume the report of Captain Baldwin's lecture, commenced in our previous issue and concluded in to-day's. The Australian Mutual Provident was not included amongst the offices he had referred to, because it required something more than a mere passing reference to contrast the advantages offered by this company with those which the Government held out. It was rather difficult indeed to compare the two, and for this reason that the Australian Mutual Provident gave its policy holders profits in the shape of bonuses and the Government did not. There was one table, however, under which both systems might be fairly compared, and that was short period assurances, for under this table the Mutual Provident gave no bonuses. Take for instance a man of 30. Under

this table lie would pay the Australian Mutual Provident to assure his life for ,£IOO for seven years £1 10s 8d a year; now, if those present would consult tl:e Government, pamphlets, which they held in their hands, they would find that he would, under the same table, pay the Government only £1 3s lOd. In order fully to understand this bonus question it was necessary to look below the mere surface. At first sight this bonus was a very attractive thing to insurers, but the more closely it was examined the fewer attractious it would be found to possess. He, the lecturer, would ask them where did these bonuses come from ? They arose from the extra premium paid for insurance. A man paid an extra sum to insure his life in a Mutual Office, and this extra sum came back to him again,, or rather a portion of it did in the shape of a bonus. In proof of this Captain Baldwin read the following extract from a private letter written to him by a gentleman who had insured his life

with the Australian Mutual Provident and was now insured with the Government : —" It appears to me that the bonuses are far from certain, but that on the contrary when the critical period through which all lusurance Companies have to pass arrives, the bonus must become small by degrees and beautifully less. I find, moreover, in its heyday of prosperity the bonuses given by the Mutual Provident are not equivalent to the extra premium charged. Take my own case as an example : —I insured my life with this Society when -13 years of age for £IOOO, the annual premium on which was £35 12s 6d, amounting iu three years to £lO6 17s Gd. For this I had a bonus addition of £ls 5s 2d, payable at my death. Now had I insured with the Government the annual premium at this age would have been only £29 19s 2d, amounting in three years to £B9 17s Gd, being an immediate saving of £l7. I thus paid in cash £l7 for a bonus of £ls 5s 2d, payable at my death." As further proof of this the lecturer read an article from the daily " Edinburgh Review," and he showed from this article that the bonus system offered no additional safety since the profits which arise are periodically divided amongst the policy holders, and that it was a delusion to suppose people derived any benefits from the system since what they received in bonuses, had been previously taken from them in excessive premium. Very attractive statements wore put forward, he said from time to time .showing that persons

who h.id insured their lives with the Australiau Mutual Provident had doubled their policies iu twenty years, nnd intending insurers who gave but little thought to the matter naturally jumped at the conclusion that they would do the same, but the thing was simply impossible. Supposing that he were to advise some of those present to go into sheep farming for instance 1 and were to dilate upon the large profits that must accrue from thia pursuit, on the basis that sheep were forty ' shillings a piece, what would they think of him ? The arguments in , both cases were ju3t the same however. Sheep have been worth forty shillings a piece at one time but they are not worth that sum now, and bonuses have been given but equally large ones would never again be given. The reason why they would not was self evident. . The society was growing old, and the majority of the lives insured were now advanced in years, and must soon coma dropping in fast, eating up all the profits. Mr Black, the Actuary of the Mutual Provident, in his last report states that fewer persons out of every thousand say, die in the colonies under 45 j ears of age than in England, whilst above that age a larger number die, and the natural result is that the Australian Mutual must expect-a large mortality rate for the future. It is no use to say that these old lives can be replaced by young ones, because.the competition now-a-days is too great, and just lately two new mutual companies have been started in Australia. Then again in a mutual office the good lives lose by the bad ones. The more deaths there are the less will be the profits. A mutual office, therefore, holds out inducements to unhealthy persons, likely to die soon, but a strong healthy man ought never to select it unless he . wishes to see his profits divided amongst other persons. But he thought he had said enough to show that, as far as bonuses are concerned, " Ail is not gold that glitters." Most of those listening to him were persons of business habits, and knew therefore pretty well that if they got large returns they had to pay for these returns in one way or another, unless indeed they admitted the gambling element into the calculation, an admission which would destroy all confidence in Life Assurance. Captain Baldwin then adverted to the fact that private companies derived no small portion of their profits from those persons who, unable to meet their premiums, were obliged to throw up their policies, but the Government were very anxious that every man who took out a policy should continue it, and that his family should benefit by his thrift, and this was shown by the fact that though a man was unable to pay his money even for six months, he could within thia time resume his policy by proving he had not-suffered from ill-health in the meantime. It was also shown in the fact that he, the lecturer, acting oil his instructions, always advised people to insure for small sums, rather than large ones. A Government insurer again had this advantage, that he could pay his money through the Post Offices at home, iu the Colonies, or New Zealand, yearly, half-yearly, quarterly, or by using the Post Office Savings Banks, weekly. Then his policy was protected from all proceedings of law, insolvency or other, by getting the Postmaster to endorse it according to the prescribed form at the time of issuing it. He dwelt at some length upon the danger of procrastination, instancing two cases which had come uuder his own experience, of men who told him they would defer taking out policies until he met them again, but who were dead before

he did so, though but a short time had elapsed. Both of these men left wives and young families without a sixpence in the world. A few pounds invested when he had brought the matter under their notice would.have given,.these poor wives and young children enough to live upon in comforb. He ridiculed the idea that persons were not able to iusure their lives, asking if there was one person there present who could not, by a little self-denial, save Sd or Is a week. For his own part he was perfectly satisfied that where a man left his wife in want, his children unprovided for, in nine cases out of ten the fault was his own, considering the facilities offered by the Government. Iu answer to a question, he denied positively that the funds derived from the scheme were used as revenue. The provisions of the Act, he said, were faithfully carried out, and under the provisions of this Act the funds were lodged in the bank to a separate account, and there remained until invested by the General Assenr bly. The department was a permanent one, influenced in no way whatsoever by a change of ministry. The claims for payments which arose were paid out of the invested funds, and if at any time these latter were insufficient then the Consolidated Kevenue of the Colouy was responsible for such deficiency. They would find if they looked at the Acts that they were drawn up with the very greatest care, and that the Assembly in passing them jealously reserved in its own hands all powers of control pnd supervision. The lecture, which was interspersed with several anecdotes, was carcfullyi listeued to throughout, and on rcsum-l ing his soal the lecturer was loudly applauded.

The Rev. Mr boutar, in moving that a cordial vote of thanks be tendered to Captain Baldwin for the very instructive and interesting lecture he had delivered, took occasion to express the deep intetest he felt in tho subject of life assurance. He said that be

Ihould have almost felt it as a neglect f bii duty had he been absent from ncli a meeting, since he considered hat it was bin duty as a clergyman jo sympathise' with the temporal concerns of the people as well as with their spiritual wants. He had been a [lergymap tor ten years, and kad witiiessed many a case of distress both imong the members of his own profession of the Ministry, and the several jongregationa with which he had been :onueeted. Again and again had

heads of families been taken away, leaving no provision for their wives and children. No doubt kind neighbours and friends had gathered round the widows and orphans and helped thorn, hut had the husband and father himself exercised a little foresight and self-denial, had he but insured his life even to a small amount, no such charity would have been needed. JTq referred to the case of a clergyman -whose widow and orphans he had seen on board the ship that took them home to England. That clergyman had not insured his life. ■ One day a friend said to him Mr (mentioning the name) fcr the sake of your family you ought to insure your life. The answer was, " Oh, I am quite healthy, there is no fear of me." r X bat clergyman was <lead in a day or two afterwards, leaving his family nothing, whereas had he but invested a few pounds in an insurance policy, the widow and orphans would have had some provision. He could point to many such cases. Very few people could save much out of their annual income, but he believed there were few, if any, in the meeting who could not save enough to secure an insurance policy covering at least £IOO. He confessed that at one time he had had no little prejudice against the Government scheme . that Captain Baldwin had so ably advocated, but the scheme had only to be carefully considered to be heartily appreciated, and so high an idea had he been led to entertain of the security and other advantages which, as compared with other systems, it offered, [that, though holding a policy in another office, he had that very forenoon out a second policy with Captain [Baldwin. He concluded by earnestly freconrmending the Government scheme Kb the attention and acceptance of the ImeetiDg. (Applause.)

Mr Buchanan seconded the vote of Shanks, which was carried by acclamation.

: Captain Baldwin briefly responded, proposed a vote of thanks to Dr Giles for his kindness in occupying the chair that evening, and the meeting terminated.