HOW LIFE-OFFICES PAY THEIR DEATH-CLAIMS.
The difficulty and delay in obtaining payment of the sum assured, when death occurred, was at one time urged as an objection against the system of life-assurance; but of late years the percentage of cases in which this objection could hold good has been reduced to a mere fraction, and offices now vie with each other in facilitating prompt and satisfactory settlement. This and other material improvements in the practice of life-assurance which have been recently introduced, have tended to obviate many popular objections, and greatly to increase the number of the assured. While it is sadly true that there are thousands of homes in our country without adequate protection against the suffering and distress which the death of the bread-winner would entail, it is gratifying to find that by means of existing policies a provision has been made to the extent of four hundred and thirty-five millions sterling, for the maintenance and comfort of the widows and orphans of the future, and this amount does not include what is known as industrial business. It is difficult to realise without a strong effort of the imagination what a vast alleviation of the sum of human misery is shadowed forth in the fact just stated. The humble cottage of the artisan, and the stately hall rich with heraldic emblazonry, are alike destined to draw comfort and solace from this beneficent treasury.
We do not propose to give the history of life-assurance, or, at this time of day, to demonstrate the great advantages of the system, but to give some information which may be useful and interesting to the vast brotherhood of persons who have already availed themselves, or who intend to avail themselves, of its benefits. Notwithstanding the vigorous efforts put forth by more than a hundred competing offices to give their terms publicity, there are still men to be found who have very crude ideas of what life-assurance is and does. One man in all seriousness proposed to join one of our Scottish offices, thinking he could draw half the sum at once, and the other half later on; quaintly remarking: ‘What use is the money to me after I am dead?’ Another proposer for a policy suggested that in lieu of his annual premiums being paid as they fell due, the office should allow them to remain unpaid, and at his death deduct the sum of the unpaid premiums as a debt from the policy! Life-offices, like men, must, in order to live, find the means of living; and we are afraid that, under present conditions, no means of escape can be afforded to the public from satisfying the necessity under which all assurance offices exist—namely, that of requiring the payment of premiums, and these payments to be made punctually as they fall due.
There was a time when non-payment of the premium on the due date meant forfeiture of all benefit and all past payments; but now these hard conditions have been almost entirely abolished; while certain offices have adopted a plan by which a policy is kept in force automatically, by applying to the payment of premiums the value that would be given on surrender of the policy, so long as the value is sufficient for the purpose. There are many other points in connection with which needless restrictions have been relaxed; but there are certain well-considered regulations which must be rigidly adhered to by every well-managed office. The medical and legal faculties are essential allies of the offices, both at the commencement of the contract and at the close of it. The doctor must examine a proposer, and report on his family and personal history, before he can be admitted to benefit; and when death takes place, the doctor must certify the fact and report the cause. Again, the lawyer may prove a most successful agent for the Company in inducing men to join by advocating the benefits of life-assurance, and has an opportunity, when preparing marriage settlements or making wills, of suggesting a policy of assurance as an excellent subject for settlement or bequest.
During the last few years, the interval between death and the payment of claims has been greatly shortened; and most of the enterprising new offices have made it a point to offer settlement of the claims arising from death with the least possible delay. This is as it should be; and many of the older and more conservative offices have seen it to be to their advantage to abandon the three or six months’ interval which usually had to elapse before payment of the sum assured was made. When we consider what prompt settlement in many cases implies, this acceleration of payment is a movement which will be much appreciated, and, like every other policy of the kind, will eventually benefit those offices adopting it. It is plain that when the assurance money is the chief resource of the bereaved family, early payment by the office is of immense advantage, enabling immediate steps to be taken in some measure to supply the place of the bread-winner; and even in cases where there is other property left, the early—almost immediate—possession of ready-money must be a great boon, often enabling other effects to be disposed of at leisure, and without the loss which frequently attends a forced realisation. We observe, therefore, with satisfaction that a large number of offices now pay the sums assured either on proof of death and title, or, what is practically the same, in a month after proof of death. Not one of the seventeen Scottish offices, for instance, now retains the old style of paying six months after death. Two of the Scottish offices pay on proof of death and title; four, one month after proof of death; two, three months after date of death; and nine, three months after proof of death. Many of the English offices also have within the last few years agreed to pay their claims sooner than heretofore. This acceleration of the payment of claims has long been a desired reform, and will no doubt result in an increased flow of business to those offices which have adopted it.
In order that full advantage may be taken of this concession, co-operation on the part of the assured is needed. For instance, there is one form of ‘self-help’ which could be practised by all—namely, the production of evidence of age. When proof has not been produced to the office and admitted, there is often delay caused in getting payment. In many cases, there is among the nearest friends an astonishing absence of knowledge as to the place and date of birth of their relatives, and therefore the proper person to clear up such matters is the assured himself. If born in England after July 1, 1837, an extract from the general Registry at Somerset House, London, can be got for a small fee. At Somerset House, there are also preserved the non-parochial registers of baptisms or births kept by various bodies and congregations of Nonconformists prior to the general system of registration which commenced at the above-mentioned date. In Ireland, registration commenced only in 1863. In Scotland, the registers—with the exception of those for the period from January 1, 1820 to January 1, 1855, which are in the possession of the local registrars—are preserved at the Register House in Edinburgh, and an extract can be got on application; or the assurance office can, if requested, take an extract from the register there on payment of one shilling. Seeing that, as a rule, the correct date of birth can easily be certified, every policy-holder should do so without undue delay, and have a marking made by the office on his policy that ‘Age is admitted.’ A mistake of a year or two is easily made, and although the deficiency in annual premium may be small, the operation of compound interest, which is so essential a part of the system of life-assurance, causes the accumulation of these little sums to assume sometimes a startling appearance, when it comes to be deducted at settlement from the sum assured; and it is unpleasant for all concerned that such deduction should have to be inflicted. There is not now the fear which is said to have existed in Henry VIII.’s time, that a government register of births might be used for the purpose of a poll-tax; and as the operation of our registration system goes on, the difficulty in getting proof of age will be reduced to a minimum. When no official proof of age can be produced, offices, as a rule, co-operate with those interested, and admit the age when they have been satisfied that reasonable endeavour has been made to establish the correct date of birth. In all cases, it is evident how desirable it is that the assured should themselves see to this.
When death has occurred—that is, when, technically speaking, the policy has become a claim—intimation should be given to the office at once, which will issue two simple and easily understood forms, one to be filled up and signed by the doctor who attended the deceased in his last illness; and the other by a friend who has known the deceased for some time, and who can certify to his identity. It is, of course, impossible to produce such certificates in cases where men whose lives were assured are drowned or otherwise lost; but after reasonable delay, the offices admit and pay such claims on the best circumstantial proof of death that can be obtained. In ordinary cases, the medical certificate not only vouches for the facts, that such and such a person died at such and such a place on a certain date, but it also states the cause of death, which is of value to the offices, as enabling them to elicit certain facts necessary for future statistical inquiries.
The party who fills up the certificate of identity must be a person of respectability, to whom the deceased was well known, and who is capable of certifying that the deceased is the same person whose life was assured under the policy of assurance which is being claimed upon. It often happens that the assured has changed both his occupation and address since he assured, and of course the office must be certain that they have the right man before paying any claim. Some offices are more particular than others, and require, in addition to the above two certificates, a copy of the entry of death in the register, certified by the registrar for the district.
The forms should be returned as early as possible to the office, so as to be submitted to the directors at their first weekly meeting. The claim is then admitted, and the office intimates on what day payment will be made, provided the title of the party who is to receive the money is in order and produced to the office.
It is not going wholly outside of our present purpose to repeat the oft-given advice, that every one possessed of a policy or other bequeathable property should make a will. In the amusing episode in the Posthumous Papers of the Pickwick Club, when the will of the landlady of the Marquis of Granby has been discovered in ‘the little black teapot on the top shelf of the bar closet,’ the elder Weller, who was named sole executor, says to his son: ‘I s’pose, Samivel, as it’s all right and satisfactory to you and me, as is the only parties interested, ve may as vell put this bit o’ paper [the will] in the fire.’ Knowledge is now too generally diffused to endanger the safe custody of so important a document; but the public require to be reminded of the necessity of preserving all deeds (if any) by which policies have been assigned and re-assigned, as these will be called for by the office, before any payment is made. Between the dates of admission of claim and time of payment, some form of title must be produced, with the view of enabling the Company to prepare the form of discharge to be signed by the persons entitled to receive the money. The discharges are adjusted by the Companies free of expense to claimants, except in the case of insufficient or complicated titles, where special legal assistance is necessary.[1]
No more popular argument in favour of life-assurance could be given than the manner in which our Companies discharge their obligations. Every year, more than ten million pounds sterling are dispensed throughout the land from these beneficent institutions to sorrowing widows in their time of need, and to helpless children bereaved of a father’s care, whose love thus found a way to provide for them when he was called away.